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HMRC have issued Revenue & Customs Brief 4/11 to confirm their view of the VAT treatment of commercially operated sports leagues. It has been issued in response to enquiries from a number of organisations that run football leagues.
The brief reflects what the Revenue's policy has always been; it does not represent a change of policy.
Some sports league providers have suggested they are making supplies of land of a kind that are exempt under VATA 1994, Sch 9 Group 1 Note 16, which allows a series of lets of sports pitches to be exempt, subject to certain conditions. They consider that the essential nature of their supplies is one of pitch hire.
HMRC disagree and consider supplies made by such providers to consist of a bundle of elements, which are integral to each other. But it cannot be said that there is one principal element to which all others are ancillary.
It is necessary to establish the character of the overarching supply to determine whether it falls within the exemption and, in the taxman's view, the overarching supply is of participation in a sports league, not a supply of land.
The supplies made by commercial sports league providers are therefore liable to the standard rate of VAT.
However, supplies made by certain non-profit making bodies may fall within the Group 10 sports exemption, see Notice 701/45 Sport.
