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KEY POINTS
- Basic principles of partial exemption.
- The relevant phrase that has stood the test of time is ‘direct and immediate link’.
- Input tax claimed on renovation of club’s restaurant.
- Individuals’ main purpose for joining the club.
- Not all sports clubs may be in the same situation.
Partial exemption is one of the most difficult aspects of the VAT system. It is intended to be a black and white subject with logical outcomes but the reality is that there are many shades of grey to confuse the issues. These can sometimes involve thousands of pounds and put immense pressure on advisers and business owners to make correct decisions on input tax allocations. This was highlighted in the recent First-tier Tribunal decision featuring London’s international tennis club – Queen’s Club Ltd (TC6119) – about...
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