Clubs claiming VAT on green fees warned

Golf clubs in the UK may soon be able to claim back VAT payments on green fees, dating back over four years, following a ruling by the European Court of Justice (ECJ). However, clubs should bear in mind that pursuing a back-dated claim could leave them owing more VAT to HMRC overall, according to Steve Simmonds, director of VAT service at Clement Keys.

In a lead appeal case brought by Bridport & West Dorset Golf Club, the ECJ ruled that, as a not-for-profit, member-owned organisation, the club should not be required to account for VAT on green fees - the costs for visitors or non-members to play the course . In effect, the ECJ’s decision, which is subject to a further hearing in the Upper Tribunal so is not yet set in stone, could mean that green fees charged to non-members become VAT exempt supplies. 

Currently, only fees paid by golf club members are VAT exempt supplies but this ruling could require HMRC to amend legislation to include an exemption for non-member or visitor fees too.

If HMRC proceeds as expected, it will...

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rjshaul's picture

This is a recent response

rjshaul | | Permalink

This is a recent response from HMRC about an enquiry about advancing a VAT refund claim on green fees. Protective claim was made.   

 

"HMRC's position was that green fees paid by non-members to non-profit

making golf clubs represented additional income obtained in direct
competition with commercial golf clubs, whose fees are subject to VAT at
the standard rate. Therefore we considered that these green fees were
also subject to VAT at the standard rate. 

As you may be aware the First Tier Tribunal held that these fees are
exempt. HMRC appealed to the Upper Tribunal. The Upper Tribunal referred
this case to the ECJ. The questions referred to the ECJ related to the
interpretation of Articles 134(b) and 133(d) of the Principal VAT
Directive. In summary, clarification was sought from the ECJ as to
whether or not these fees should be excluded from VAT exemption.

HMRC have appealed to the Upper Tribunal. The Upper Tribunal referred
this case to the ECJ. The questions referred to the ECJ related to the
interpretation of Articles 134(b) and 133(d) of the Principal VAT
Directive. In summary, clarification was sought from the ECJ as to
whether or not these fees should be excluded from VAT exemption.

It is not clear at this stage whether the case will need to be referred
back to the Upper Tribunal for a decision. Indirect Tax Directorate is
considering the judgment in full and will issue a more detailed update
for HMRC as soon as possible. 

You can read the full judgment by going to the home page of the ECJ and
searching by the case reference number (C-495/12).

Our Public Notices can be accessed online via our website
www.hmrc.gov.uk by following these steps >> Library (Quick links) >> 
Publications >> Notices, Information Sheets and other reference
materials >> VAT >> All VAT Notices (numerical order).

If you have any further queries regarding this matter, please submit
your enquiry via our website, ensuring that you quote the case reference
number at the top of this reply. Enquiries can be submitted by following
the appropriate links on the VAT 'Contact us' page at www.hmrc.gov.uk "