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VAT tribunal decides the grass is greener for golf clubs
Posted by Wendy Andrews on 6/15/2011
The VAT tribunal has recently considered the VAT treatment of green fees received by members golf clubs. HMRC had treated them as subject to VAT but the Tribunal has decided that in the case of the Bridport and West Dorset Golf Club Limited, the green fees paid by non-members could be exempt from VAT in the same way as the fees paid by the members themselves.
The tribunal judge - reversing an earlier decision of his own! - concluded that in the circumstances of Bridport, it was not appropriate for sporting services (e.g. the green fees) supplied to non-members to be treated differently from those supplied to members. This was on the basis of the evidence of a director of the club that income from green fees was not treated as incidental by the club (providing services to non-members was envisaged in its articles, and it made up an important part of the budgeted income of the club), and the income was not used specifically to raise funds for a particular purpose or only offered occasionally, when extra revenue was required. Instead, it contributed to the general running costs of the club.
HMRC have 56 days from 1 June in which to decide whether to appeal the decision to the Upper Tribunal.
HMRC do not generally consider themselves to be bound by VAT tribunal decisions, so they are unlikely to make any repayments at this stage unless they decide not to appeal the decision further. Any golf clubs, or other members sports clubs which make similar charges which have not already made claims should now consider doing so for the last 4 years.
Wendy can be contacted via email at wandrews@bishopfleming.co.uk.
All information correct at time of posting.