17 February 2015
HMRC has issued its definitive guidance on claims by non-profit making members’ sports clubs for overpaid VAT on supplies of sporting services made to non-members in VAT information sheet 01/15.
This issue has rumbled on for a number of years, with variations in the advice given to sports clubs by HMRC and VAT professionals. The new HMRC guidance states its understanding of the law as it currently stands and deals with the position of claims that are already in the pipeline and claims that are yet to be made and explains the time limits that apply.
Also covered is HMRC’s view of the type of supplies that qualify and the type of person to whom qualifying supplies may be made. There’s no doubt that the sports clubs to which these rules apply will be golf clubs predominantly and much of the guidance looks at the sorts of supply that commonly occur at golf clubs. So a green fee charged to an individual non-member is exempt, but the supply of a buggy to the same individual is standard-rated. Equally, a non-member who attends a golf day at a course with the Dog & Duck Golf Society is likely to benefit from VAT exemption of the green fees, whereas the same individual who attends the same course as a guest at the UHY Hacker Young promotional golf day will probably be enjoying a standard-rated round of golf. Not that the individual will mind much about the latter being standard-rated, as he won’t be paying the VAT anyway!
The impact of clubs is also considered and a change in what were previously standard-rated supplies to exempt supplies may affect clubs’ partial exemption input VAT reclaims. Output VAT maybe given with one hand, but input VAT may be taken with HMRC’s other hand!
Sports clubs should read the guidance and consider how it applies to their own positions. If there’s any doubt, professional guidance should be sought. If you would like to discuss the details of this blog post further, please contact John Sheehan from our Letchworth office or a tax adviser at your nearest location. Alternatively, you can complete our online contact form.