HMRC – Guilty of slow play regarding golf club case

golf club VAT

Across the UK, Members Golf Clubs are still waiting for H M Revenue & Customs (“HMRC”) to make an announcement of its position regarding the decision of the Court of Justice of the European Union (“CJEU”) in the case of the Bridport & West Dorset Golf Club Limited.

As you will recall, the CJEU has ruled that there should be no disparity between the VAT treatment of fees charged by not for profit Members Clubs to members (exempt of VAT) and those to non-members/temporary members (subject to VAT) for the playing of golf.

For some months, HMRC has been promising that a Business Brief will be issued “shortly”. The latest development is that HMRC has asked the Tax Tribunal to put all Appeals on hold until July 18th.The CJEU ruling leaves HMRC very little room to manoeuvre. However, it seems that HMRC has made its request of the Tax Tribunal in order to determine whether it could block claims for overpaid VAT by using the unjust enrichment provisions. These provisions exist in order to prevent an organisation from benefiting from a VAT windfall, leaving its customers who paid the VAT in the first place out of pocket. In order to succeed, HMRC would need to show that golf clubs would have charged customers less if the fee had not been subject to VAT. In practice, it is likely that clubs will continue to charge the same price for green fees now that they are VAT exempt as they did previously. This supports the view that fees are generally set by reference to the market regardless of the VAT liability, making the unjust enrichment argument difficult for HMRC to pursue.

For current and future VAT periods, qualifying Clubs should treat green fees as exempt of VAT in line with the CJEU ruling.

Clubs who have VAT periods ending June or July 2010 may, in the interim, wish to consider making a “protective claim” for those periods to ensure that they are not “out of time” under the 4 year capping provisions.

For assistance on how to make a “protective claim” for your golf or sports club; or for any assistance on VAT or taxation generally call our dedicated team on 0845 177 5500 for a free initial review.

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