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VAT on Golf Green Fees? What do we do?

VAT on Golf Green Fees? What do we do?

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Just before Christmas the ECJ announced that it agreed with KPMG in the long-running case of Bridport & West Dorset Golf Club v HMRC that VAT was not chargeable on green fees charged to visitors. I understand that the UTT has now to deal with the case which they had referred to the ECJ.

My question is: In the absence of a press release from HMRC or a decision by UTT, what do we advise golf club clients to do? Should they stop charging VAT on green fees from (say) 01/01/14 (and hence reduce green fees by 1/6th)? Should they continue to charge VAT but take the names and addresses of visitors so that refund can be made when better guidance is available?

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By carnmores
03rd Jan 2014 15:21

they should continue to charge VAT

and pay it over pending finalisation of the matter. as regards your last point i would say that once the matter is resolved it is up to the golfer to ask the club for a refund

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By BKD
03rd Jan 2014 15:58

My view ...

... more or less agrees with the above. Continue accounting for VAT until HMRC have announced how they are to respond to the decision.

I do not, though, believe that golfers should be entitled to any refund. Most golf clubs that I know set their membership and visitor fees at the most competitive rate that they can, treating the VAT element as a cost. It is of no interest to the ordinary player whether his fee includes VAT or not - the cost of a round is what it is. Which I why I emphasised the words above - it is not a case of continuing to add VAT to fees, it is a case of continuing to hand over part of the fees to HMRC.

I think it was a case involving tea-cakes and unjust enrichment that allowed the taxpayer to retain the output VAT repaid to them - it all boils down to the basis on which prices are set.

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By julian.sims
03rd Jan 2014 16:49

HMRC repayment claims - unjust enrichment

Just bear in mind that HMRC may take a long time to repay any output VAT overpaid on these cases and will certainly look at the unjust enrichment issue.

Was involved in a claim following the Paymex case and they were in no hurry to deal with this and make a refund.

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By BKD
03rd Jan 2014 20:43

I agree, Julian

But think that Marks & Spencer is more relevant in this case.

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By Jim Cornock
08th Jan 2014 08:59

What about the repayment of recovered input VAT under partial exemption?

Is this now repayable to HMRC?

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By eddies368
08th Jan 2014 09:19

Partial exemption

I agree totally with BKD. Don't forget that once HMRC have admitted defeat you can go back 4 (3?) years and recover the input tax paid over. At the same time you will need to review the annual partial exemption calculations which may well reduce the net recovery. I well remember a similar scenario 20 years ago when members' subscriptions were deemed exempt. My own club reclaimed about £90,000 and unjust enrichment was not an issue. 

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By andrewdiver
24th Jan 2014 12:35

Should the golf club be putting in a provisional claim for refund pending this case to keep open the 4 year claim window or will the ability to claim be based on 4 years from the date of HMRC admitting defeat on the position? 

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Replying to bernard michael:
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By D.Dodds
10th Jun 2014 14:24

4 year rule

andrewdiver wrote:

Should the golf club be putting in a provisional claim for refund pending this case to keep open the 4 year claim window or will the ability to claim be based on 4 years from the date of HMRC admitting defeat on the position? 

 

I assume that it would be 4 years from the date of the ECJ ruling

 

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Sarah Douglas - HouseTree Business Ltd
By sarah douglas
24th Jan 2014 15:00

Uk Golf Club Association

Hi 

The Uk Golf Club Association has sent the below articles to owners and Management of Golf Clubs.   I am just in the middle of redoing the apportion calculations for a few local golf clubs to reclaim and to see the effect, not all Golf clubs keep the best of records so they will have a hard time with the HMRC. 

The below articles may be useful to those interested in this topic. I know my local golf clubs do not plan to give it back and as some have mentioned above the apportionment claim also needs to be recalculated.

http://www.golfclubmanagement.net/2013/12/ruling-green-fees-must-be-exempt-from-vat/

http://www.golfclubmanagement.net/2012/05/raise-vat-call-leads-to-angry-backlash/

http://www.golfclubmanagement.net/2012/05/clubs-hope-for-six-figure-windfalls/

http://www.golfclubmanagement.net/2013/10/agco-to-take-government-to-court/

http://www.golfclubmanagement.net/2012/07/agco-meets-with-top-treasury-official/

http://www.golfclubmanagement.net/2014/01/clubs-should-pass-vat-refund-back-to-golfers/

I hope this helps anyone who is interested 

Kind Regards Sarah Douglas Douglas Accountancy and Bookkeeping Services 

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