Status of repairs

A golf club claimed input tax on the repair costs to a lift at the clubhouse new curtains for the bar and lounge area and refurbishment of bar furniture. The taxpayer claimed that all items of expenditure were wholly linked to the taxable supplies of food and drink.

HMRC ruled that the costs were also linked to exempt supplies of golf club membership because the bar was “part and parcel of the running and benefit of the club as a whole”.

The taxpayer appealed.

The First-tier Tribunal agreed with HMRC. The judge said the use of the clubhouse was an intrinsic part of membership. It could not be said that the bar and lounge area was used exclusively for the sales of refreshments. It was “at least in part a meeting place for golfers to manage co-ordinate and enhance their golfing activities”. From an economic perspective the...