On 27 July 2011, HMRC issued Brief 30/11 (www.hmrc.gov.uk/briefs/vat/brief3011.htm). They insist that the First Tier Tribunal has erred in applying European Law. They will therefore Appeal the matter to the Upper Tier. They have said that they will not pay any claims by other Golf Clubs while the Appeal process continues.
This follows the decision of the First Tier Tribunal in 'The Bridport and West Dorset Golf Club Ltd;' see (www.bailii.org/uk/cases/UKFTT/TC/2011/TC01214.html).The decision is well written, since the case was a lead case for numerous Golf Clubs. It also pre-empted the Appeal by HMRC, which has now been confirmed. There is a detailed analysis of the European provisions, which is helpful.
The case deals with green fees charged to non-members by Members' Clubs. Membership Fees for such Clubs is already exempt from VAT. Membership Fees for privately-owned Clubs is taxable. Check out HMRC's own Internal Guidance at (http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.por...) although it may now be out of date! There is also some information at (www.hmrc.gov.uk/manuals/vsportmanual/Index.htm).
Note that, where claims are made, adjustments to Partial Exemption calculations will also be required.
Golf Clubs, and other sports clubs who receive similar income from non-members should submit claims, although HMRC will reject them. In the event that the issue is concluded in the taxpayers' favour, those claims will be paid. Do not wait for the Appeal process to be concluded, since claims can only go back for 4 years from a current date.