A birdie on the 18th – Good VAT news for the golfing community?

In what could be a potentially significant saving for keen golfers all over the country, the European Court has recently given their ruling in the long running VAT case of Bridport & West Dorset Golf Club.

So what is this all about?

The case was centred on the VAT treatment of non-members green fees in not-for-profit golf clubs and whether they should be standard rated or exempt from VAT.

The previously established treatment applied by HMRC was that, although members fees were exempt from VAT, any green fees paid by non-members would have VAT charged at the standard rate of 20%.

This HMRC legislation has been challenged in recent years by Bridport & West Dorset Golf Club, alongside hundreds of other golf clubs as not being in line with the European Directive which states that "the supply of certain services closely linked to sport or physical education by non-profit-making organisations to persons taking part in sport or physical education" should be exempt from VAT.

The recent ruling by the European Court has sided with the golf clubs, confirming that the fees charged to non-members should also be exempt from VAT.

Will golf clubs be able to claim money back from HMRC?

Yes, this should allow golf clubs to reclaim from HMRC, potentially thousands of pounds in overpaid output VAT, as well as removing the need to account for VAT on non-members green fees going forward.

However, there will be an effect on their input tax recoverability.  As more supplies will now be considered as being exempt from VAT, this will reduce the amount of input tax that they can recover on their expenditure.

Will golfers receive a refund from payments in the past?

Unfortunately, the simple answer to this is no, probably not.  This is not required by HMRC, and most golf clubs are likely to retain the money, which could then be used for facility improvements etc.

Will golf clubs reduce the charge for green fees in the future?

Ultimately, it will be at the discretion of the individual golf clubs to decide whether or not to pass these savings on to their customers, but it may be worth checking the next time you head out to your local not-for-profit members club for a round, as to whether there is any savings to be made. 

You never know, this saving might just free up the funds to get that new driver you’ve had your eye on.

 

David Graham, Assistant VAT Consultant.

Keith Johnston, Tax Director.

If you like this article and would like our FREE updates sent straight to your inbox then subscribe to our monthly newsletter

Subscribe

Get in touch

To find out more about how we can help you or your business, call us on 0808 144 5575 and speak to a member of our team. Alternatively use our contact form to send us a message or arrange a callback.

CALL 0808 144 5575

or

Contact Us

All content © 2015 Armstrong Watson. All Rights Reserved. Website by Simon Pighills.

Armstrong Watson LLP is a limited liability partnership registered in England and Wales, number OC415608. The registered office is 15 Victoria Place, Carlisle, CA1 1EW where a list of members is kept. Armstrong Watson Accountants, Business & Financial Advisers is a trading style of Armstrong Watson LLP. Armstrong Watson LLP is regulated by the Institute of Chartered Accountants in England and Wales for a range of investment business activities.

Armstrong Watson Audit Limited is registered to carry on audit work in the UK and Ireland by the Institute of Chartered Accountants in England and Wales. Registered as a limited company in England and Wales No. 8800970. Registered office: 15 Victoria Place, Carlisle, CA1 1EW

Armstrong Watson Financial Planning Limited is authorised and regulated by the Financial Conduct Authority. Firm reference number 542122. Registered as a limited company in England and Wales No. 7208672. Armstrong Watson Financial Planning & Wealth Management is a trading name of Armstrong Watson Financial Planning Limited. Registered Office: 15 Victoria Place, Carlisle, CA1 1EW