New VAT Opportunity for Indoor and Outdoor Football League Operators
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31st October 2013
HMRC have been rejecting claims for VAT declared by indoor and
outdoor football league operatorís and upholding assessments for VAT
made against those operators who continued to treat the income as VAT
exempt. This is despite Goals Soccer Centres success in challenging
HMRCís view that VAT was due on income from indoor leagues.
HMRC has maintained an argument that other operators are not
affected by the decision as Goalís business operated in a specific way.
Therefore other league operators were not on ďall foursĒ with Goals.
HMRC used this argument to reject claims for VAT declared by league
operatorís and upholding assessments made against those operators who
continued to treat the income as VAT exempt.
We are now aware that HMRC may well have substantially changed
their stance from stating that they do not agree that other operators
are on ďall foursĒ with Goals to giving indoor league operators two
options with regards to their VAT position.
1. Accept that the business is making two supplies, one of the
exempt land (the pitch hire) and the second being league management
services. The VAT declared on league fees would then only be due on the
management services element. The obvious point here is that there will
be scope for debate with HMRC as to the value of the management
services element of the supply and operators will need advice on how to
support the valuation used.
2. Continue to argue that a single supply is being made that is exempt
from VAT, in which case the matter would need to be decided at tribunal
on a business by business basis unless one operator succeeds at higher
Tribunal level (as HMRC will reject any VAT claims and uphold any
assessments that they may have made).
This apparent change in position by HMRC is to be welcomed as
unless an operator has deep pockets proceeding to tribunal may not be
as cost effective as accepting option 1. Operators who adopt option 1
will also be partially exempt and will need to consider the impact on
their VAT recovery position especially if they own or have built the
property that they operate from. In some cases this may result in VAT
claimable on costs that has previously been irrecoverable.
We also understand that operators will need to ensure that all
their terms and conditions etc are worded in an appropriate manner
going forward in order to support the desired VAT treatment.
About the Author
VAT People are leading VAT and Customs Duty
consultants based in the
North West of England. We work with a wide range of businesses
throughout the UK as well as assisting our accountancy colleagues to
unravel the thorny VAT issues for their clients. We are one of the UK's
largest and most comprehensive sources of VAT and Customs advice, our
consultancy team having over 140
years of experience in VAT and Customs
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Call us on our VAT helpline 0800 077 4604 to discuss. All initial discussions are free with no-obligation.
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Article Published/Sorted/Amended on Scopulus 2013-11-12 11:39:12 in Tax Articles