Good News For Shooting Syndicates
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Good News For
16 July 2014
It can be
argued that the membership of a golf club is very similar to the
a shooting syndicate and therefore the shooting industry has closely
scrutinised the long-running case involving Bridport
and West Dorset Golf Club and their attempts to try and
ensure that non-members of the club, ie visitors to the golf club or
non-members to the shooting syndicate - those who just come and “take a
not have to have VAT charged on the supply.
It is a
well-known fact that most of those who can afford a day’s shooting feel
they contribute very heavily to the UK tax system and then to have to
on their days shoot has therefore been causing lots of aggravation. So
the Bridport case was one of
It is important that we look at the details of the case so we can check
really does apply to a shooting syndicate, and that the set up as
membership with the correct qualification for a sport has been achieved.
The long running
Bridport and West Dorset Golf Club,
a private, non-profit making golf club. For several years, the club
for VAT on its green fee income, ie fees paid by visiting non-members,
2009 it claimed a repayment of the VAT on the basis that these fees
under article 132(1)(m) of the EC VAT directive. Article 132(1)(m)
member states to exempt “certain services closely linked to sport”.
133 and 134 provide some restrictions on the scope of this exemption.
UK, VATA 1994, Sch 9 group 10 item 3 provides that, where the supplier
a membership scheme, supplies to non-members are not exempt.
Club commenced by taking this case to what is known as a First-tier
body allowed Bridport’s claim to not have to charge non-members or
VAT. Not content with this ruling, HMRC appealed to the Upper Tribunal,
turn, referred the matter to the Court of Justice of the EU for a
ruled that the exemption in article 132(1)(m) should apply to fees
visiting non-members, although the club was not obliged to pass on the
to players. Thus the UK legislation was not compatible with its EU
The judgement confirms the view of KPMG, whose legal services team
litigation, that Sch 9 group 10 item 3, under which green fees paid by
non-members were taxed at the standard rate of VAT was incorrect.
Item 3, Group
10, Schedule 9, Value Added Tax Act 1994 (VATA), exempts sports
‘eligible bodies’ to participants, but, where the body operates a
scheme, the exemption is limited under its provisions to supplies to
thus excluding supplies to non-members (which are thus taxable).
interestingly since this case the group 10 exemption has come under the
microscope for the Bridge case which was checking whether it considered
the game of Bridge was actually a sport. This Tribunal case failed but
understood this decision will be appealed.
There is no
specific sanction for this non-member exclusion in the Principal VAT
(PVD), but HMRC has claimed that the PVD does provide a basis for such
restriction by not allowing the exemption to apply to services which
entered into merely to raise money for the organisation and which may
distort competition with non-qualifying bodies.
conclusion of the Tribunal was that non-members can qualify for the
from the VAT charge. They did refer to the CJEU case C-495/12.
The group 10 exemption was meant to encourage sport by
not charging VAT and it is pleasing to note that the Bridport
case has succeeded to encourage sport in this way. Various
shooting clubs and syndicates can also enjoy this VAT exemption when
days for non-members.
would like to find out more about the formation of a shooting members
syndicate then do not hesitate to contact the writer.
Customs brief 25/14 provides an
update on how HMRC will
deal with repayment claims after the decision by the Court of Justice
of the EU
& West Dorset Golf Club
in December 2013. A summary of the brief follows
As a result
of the judgement, HMRC agree that supplies of sporting services to
non-members of non-profit making sports clubs are exempt from VAT. This
provided that the services are closely linked and essential to sport
made to persons taking part in sport. HMRC will legislate by 1 January
will have to be adjusted to reflect any over-claim of input tax by
their partial exemption and/or capital goods scheme calculations.
be sent to: VAT Bridport Claims SO483, PO Box 200, Bootle, L69 9AH.
About the Author
Supplied by Julie Butler F.C.A.
Butler & Co, Bennett House, The Dean,
Alresford, Hampshire, SO24 9BH. Tel:
01962 735544. Email;
F.C.A. is the author of Tax Planning for Farm and Land
Professional), Equine Tax Planning
ISBN: 0406966540, and Stanley: Taxation
of Farmers and Landowners (LexisNexis).
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Article Published/Sorted/Amended on Scopulus 2014-07-21 09:07:29 in Tax Articles