Amateur sports clubs have been granted charitable status for tax purposes.

The Budget boost for local sport is to be backdated to 1 April and will allow clubs to slash their tax bills.

Together these measures provide an unprecedented boost for community sport Paul Boateng

The move has been billed as a major boost for amateur football clubs and other organisations which are judged to benefit the local community.

Chancellor Gordon Brown said the government would also provide an extra �20m for the renovation and improvement of such organisations, known as Community Amateur Sports Clubs (CASCs).

That cash will come from the Capital Modernisation Fund.

Financial Secretary to the Treasury Paul Boateng said: "Amateur sports clubs are at the heart of sport and community life up and down the country.

"The Charity Commission's decision to recognise as charitable CASCs that "promote community participation in healthy recreation" will enable many sports clubs to access the valuable tax benefits that go with charitable status."

The move allows clubs to claim back tax on donations made by local people.

"In addition, a further �20m of capital expenditure will be made available for investing in enhanced community sports facilities.

Tax free income

"Together these measures provide an unprecedented boost for community sport."

Under the changes, up to �15,000 of CASCs income will be exempt from tax.

Income from interest will also be exempt and clubs will be allowed to avoid tax on any rental income up to �10,000.

Gift aid will be extended to donations and inheritance tax relief introduced on bequests.