This brief provides an update on HM Revenue and Custom (HMRC)ís
work on unjust enrichment as announced in Revenue and Customs Brief 25
(2014):VAT - supplies of sporting services by non profit making bodies
and explains what action membersí golf clubs which submitted claims
need to take now.
Membersí golf clubs and other non-profit making sports clubs
and their advisers.
Following the judgment by the Court of Justice of the European
Union in Bridport & West Dorset Golf Club, HMRC announced
(revenue-and-customs-brief-25-2014) that it was considering whether
clubs would be unjustly enriched if claims were refunded in full. This
brief reports the conclusion of that work.
4. Unjust enrichment
review found that if claims were credited in full some clubs would be
unjustly enriched by 50% and others by 67%. Some clubs disagreed with
the conclusions of the review and with HMRCís position
that corporate days and supplies to tour operators are standard rated,
as outlined in VAT Information Sheet 01/15: claims by non-profit making
membersí sports clubs for overpaid VAT on supplies of sporting services
made to non-members. These issues have recently been heard by the First
Tier Tribunal (FTT).
Although the question of unjust enrichment is still before the
has decided to pay or credit, subject to conditions (see below), 50% or
33% (depending on the golf club) of the value of valid claims ahead of
any court decision. HMRC
will credit a claimantís VAT account if there is an outstanding debt.
The amount repaid or credited to each claimant will depend on
the level of green fee charges. Where a golf club charges any green fee
now or during the claim period, of over £100 per person for a round of
golf, at any time of the year, HMRC
will repay or credit 33% of its VAT
Information Sheet 01/15 compliant claim. All other claimants
will receive 50% of their VAT
Information Sheet 01/15 compliant claim. HMRC considers
the level of green fees is representative of a clubís ability to pass
on the VAT cost to its customers.
5. Next steps
So that HMRC
may pay or credit the appropriate amount to each club, please:
that you have checked and where necessary adjusted your claims in line
Information Sheet 01/15 - this helps minimise any errors and
we have found a high level of error in claims checked
confirm if your green fees are less than, or over, £100
per person per round
confirm whether or not you would like an interim payment
or credit on your account - if you have not checked or adjusted your
claim because you disagree with the policy detailed in VAT Information
Sheet 01/15, HMRC
will not consider your claim until the FTT issues a
Please provide the information for points 1 to 3 above and any
new or adjusted claims to:
VAT Bridport Claims SO483
PO Box 200
If a club does not pass on to the affected customers the
repaid or credited amounts of output tax there may be direct tax
implications. For example, trading income from non-members is taxable.
Any surplus of non-member income that remains after deduction of
relevant expenses is liable to Corporation Tax.
6. New claims
All new claims will be subject to the 4 year time limit in
section 80(4) of the VAT Act 1994.
7. Return adjustments
Membersí clubs with over declarations of output tax within
certain monetary limits may wish to correct any errors on their VAT
returns rather than submit a formal claim under section 80 VATA 94 to HMRC. However in
doing so they would not receive any interest. Further information on
the monetary limits and which returns may be adjusted is available in VAT
Notice 700/45: How to correct VAT errors and make adjustments and claims.
In circumstances where membersí clubs have not taken due care
in submitting valid claims, they may be charged a penalty in relation
to prescribed accounting periods starting on or after 1 April 2008,
where the return due date is 1 April 2009 or later.