Clubs and Taxable Income

Clubs and Taxable Income

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Hi ,has anyone out there had any recent interest from HMRC regarding clubs and how their taxable income is split .Had some recent enquiry about fairly minimal visitor fee income in relation to bar sales  and pool table and room hire.This has never occurred before or been a problem.

Any help would be much appreciated.

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By Les Howard
05th Mar 2015 11:23

possible explanation

If the visitor fee is exempt, and it enables the visitor to access previously 'fully taxable' areas, then this may have an impact on a Partial Exemption calculation.

The Club will be keen that the bar area, in particular, is fully taxable, to ensure high input tax recovery. HMRC prefer more areas within a building to be 'residual,' so that only a proportion of input tax can be recovered. This may present no problem on day-to-day running costs, but will have a significant impact in the event of a refurbishment.

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By F.
05th Mar 2015 11:46

That's interesting, MeIN.

I've been looking into this general area as I've been asked to act as Treasurer for a local members club.  My understanding is that income from members is not treated as taxable income, but income from visitors in fact is (Carlisle & Silloth Golf Club v Smith, 6TC48 and 198).  Accordingly, a reasonable proportion of related expenses are then deductible against this income in the tax computation.  See here.

I'm presuming that the club has CT liability in excess of £100, and is therefore not being treated as non-trading by HMRC?  And they are now enquiring into the split to ensure the correct apportionment is made?  That could be tricky with bar sales & pool table rental.

This area is new to me I might add; indeed I'd appreciate you having a look at a question I posted recently myself if you have experience in this area.

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