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Our Latest VAT Update For Non-Profit Making Sports Clubs

In the recent case of Bridport and West Dorset Golf Club (and following principles established in the case of Canterbury Hockey Club)that exemption from VAT not only applied to playing fees paid by members, but also to playing fees paid by temporary members or visitors ("green fees"), where certain conditions are met.

 The conditions are:

•  That the Club must be making supplies which are closely linked and essential to sport ;
• That those supplies are supplied to (ultimately) individuals taking part in sport; and
• That the fees received from temporary members/visitors must form an integral part of the income of the Club, and not simply be additional or ancillary income.

 The First Tier Tribunal stated that the UK authorities had incorrectly implemented European law into UK legislation. In the UK, H M Revenue and Customs (HMRC) insist that VAT is paid on green fees.

HMRC has Appealed the decision of the First Tier Tribunal to the Upper Tier Tribunal and a new hearing date is awaited. The decision of the Upper Tier Tribunal, if it follows the First Tier Tribunal, will have significant ramifications for non-profit making sports clubs generally if they are VAT registered and accounting for VAT on such income. A significant number of Clubs, particularly Golf Clubs, have submitted "protective" claims going back a number of years, and the VAT involved is substantial.

Also, the case of Chipping Sodbury Golf Club is due to be heard shortly and again this will have implications for (possibly) both commercial and non-profit making sports clubs.

Thomas Westcott will provide further updates on the latest developments and if you would like further information or advice please contact David Pegg, Partner and VAT Specialist Adviser on 01392 288 555 or at david.pegg@thomaswestcott.co.uk.