.png)
.png)
HMRC have stated their position following the First-tier Tribunal decision in The Bridport and West Dorset Golf Club (TC1214). The appeal concerned the VAT liability of green fees charged by the club to non-members.
Under VATA 1994, Sch 9 Group 10 Item 3, supplies by non-profit-making bodies of services closely linked and essential to sport to individuals taking part in sport are exempt from VAT.
However, where the body operates a membership scheme, supplies to individuals who are not members are excluded from the exemption and subject to VAT.
The tribunal concluded that, by restricting the exemption to supplies made to members, the UK law was acting contrary to the purpose of the exemption in the Principal VAT Directive.
The Revenue believes the tribunal has interpreted EU law incorrectly, and considers that where clubs that run membership schemes make charges to non-members for the use of certain sporting facilities, such as green fees, the charges are standard rated.
The taxman has sought permission to appeal to the Upper Tribunal (Tax and Chancery Chamber).
In Revenue & Customs Brief 30/11, the department says businesses should continue to follow the guidance in Notice 701/45 Sport and standard-rate these types of supplies made to non-members of a membership club.
Should golf clubs decide to exempt their green fees on the basis of the First-tier Tribunal’s decision, HMRC will assess the underdeclared tax and enforce the assessments. Penalties may also apply.
