Save content
Have you found this content useful? Use the button above to save it to your profile.
AIA

Bridport Golf Club wins ECJ VAT fee case

by
21st Jan 2014
Save content
Have you found this content useful? Use the button above to save it to your profile.

Golf clubs around the UK got an extra present just before Christmas when the European Court of Justice (ECJ) ruled that Bridport and West Dorset Golf Club did not have to pay VAT on green fees collected from non-members.

In a decision dated 19 December, but issued without a supporting opinion, the court resolved issues that had been referred to it by a UK upper tier tribunal judge because of the “general importance in the community” about how exemption from VAT was applied to amateur sports clubs.

As AccountingWEB podcaster Anne Fairpo explained at the time of the referral, HMRC v Bridport was a lead case for more than 450 golf clubs and other sports organisations.

The case arose in 2009 when the club tried to recover the output VAT it had accounted for to HMRC. Reacting to what it saw as potential unjust enrichment HMRC took the case to tribunal, which the golf club won. When HMRC appealed to the upper tribunal, Mrs Justice Proudman referred it on to the ECJ to decide on the interpretation of  articles 133(d) and 134(b) of Council Directive 2006/112/EC of 28 November 2006, the principal directive on the EU’s common system of value added tax.

The ECJ accepted that Bridport is a non-profit-making organisation as defined in the directive and that charging fees to visiting non-members to use the golf course is closely linked to sport, an activity that the VAT exemption was designed to encourage.

“It follows that if that supply is provided by a non-profit-making body, it is covered by the exemption from VAT provided for in Article 132(1)(m), it being immaterial whether it is provided to a member of the body or to a visiting non-member,” the court ruled in paragraph 22 of its decision.

The original EU provision on VAT exemptions did not lay down restrictions based on the status of who receives the services, so “member states have no power to exclude a certain group of recipients of those services from the benefit of the exemption in question,” the ECJ ruled, citing the Canterbury Hockey Club decision that had originally inspired Bridport to reclaim VAT on its non-member green fee income.

Tags:

Replies (2)

Please login or register to join the discussion.

avatar
By tiernay
21st Jan 2014 17:33

VAT on green fees

Under the proposed new rules governing CASC, golf clubs with turnover over £100,000 are being forced to consider incorporating trading companies in order to hive down trading activities such as the green fee income and bar trading in order to retain their CASC status. It must surely follow that such trading companies will not be "non-profit" organisations as envisaged by the ECJ, and, accordingly, that green fees will continue to be standard rated supplies in these new companies. The alternative is for clubs to abandon their CASC status, but they will then become very largely VAT exempt businesses (except for bar trading), with the consequent loss of all course running costs input VAT. Green fees will have to continue to be charged as if VAT inclusive in order make good the shortfall of partially exempt  input recovery on course expenditure. A further thought is whether this would increase HMRC's unwillingness to repay past VAT under the unjust enrichment rule.

Thanks (1)
avatar
By goochmaloney
25th Jun 2014 14:37

VAT on green fees

It occurs to us that if you have been charged VAT on a green fee when playing at a Golf Club, you should, as an individual or group (visiting societies) also be able to reclaim the VAT charged by the club to you.

It should not just benefit the club, who, as it turns out, charged you in error.

Any feed back on this would be welcombe 

Thanks (0)