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HM Revenue and Customs Brief 30/11


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Issued 27 July 2011

VAT: HMRC's position following the First-Tier Tribunal decision in the case of The Bridport and West Dorset Golf Club Limited

This brief explains HM Revenue & Customs' (HMRC's) position following the First-Tier Tribunal decision in the case of The Bridport and West Dorset Golf Club case (TC/2009/122260). The appeal concerned the VAT liability of green fees charged by the golf club to non-members.


Bridport and West Dorset Golf Club is a non-profit making members’ golf club. The issue before the tribunal was whether the charges, known as green fees, made by the club to visiting non-members in return for the right to play golf are exempt from VAT or, as HMRC maintained, standard rated.

Under VATA 1994 Schedule 9 Group 10 Item 3, supplies by non-profit making bodies of services closely linked and essential to sport to individuals taking part in sport are exempt from VAT. However, where the body operates a membership scheme, any supplies to individuals who are not members are excluded from the exemption and subject to VAT.

The tribunal concluded that by restricting the exemption to supplies made to members, the UK law was acting contrary to the purpose of the exemption in the Principal VAT Directive (or, in other words, had failed to “correctly implement its terms”). It was not persuaded by HMRC’s argument that the exclusion applied to non-members was justified on grounds that it reduced distortion of competition. As a result, it agreed with the golf club that supplies to non-members of green fees were exempt from VAT.

HMRC's position

HMRC believes that the tribunal has erred in interpreting EU law and remains of the view that where clubs that run membership schemes make charges to non-members for the use of certain sporting facilities, such as green fees, the charges are standard rated. They have, as a result, sought permission to appeal to the Upper Tier Tribunal.

Decisions of the First-Tier Tribunal are binding only on the parties to the decision. Consequently, we do not propose to pay other claims already submitted and we are not inviting new claims in the wake of this decision. Any claims that are submitted will be rejected.

HMRC consider that businesses should continue to follow the guidance in Notice 701/45 Sport and standard-rate these types of supplies made to non-members of a membership club. Should any golf clubs decide to exempt their green fees on the basis of the First-Tier Tribunal's decision, HMRC will assess the underdeclared tax and enforce the assessments. Penalties may also be applicable in such cases.

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© Crown Copyright 2011.

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Article Published/Sorted/Amended on Scopulus 2011-07-28 16:18:55 in Tax Articles

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