Affiliation fees paid by golf clubs

The taxpayers owned golf clubs that paid annual affiliation fees to several regional and national governing bodies. The taxpayers charged these fees to their members but had to pay them irrespective of whether the members paid. About one-third of members did not pay mainly because they considered there was no benefit in doing so. A dispute arose as to whether the affiliation fees were subject to VAT. HMRC said they were exempt under VATA 1994 Sch 9 group 10 item 3 but the clubs said the fees should be standard rated. They said the exemption applied only to non-profit making businesses. Further the services had to be essential to the sport and those they provided were not.

The First-tier Tribunal found in favour of HMRC.

The Upper Tribunal did not agree that the exemption applied only to non-profit making organisations. Referring to Canterbury Hockey Club v CRC (Case C-253/07)...