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Golf club article


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16th January 2015

Many of you will be aware from our previous articles that HMRC have been reluctant to release the VAT over declared by not for profit and members golf clubs on visitors greens fees. This is despite the success in the Courts of the lead case involving Bridport and West Dorset golf course.

HMRC contended that economic research indicated that such golf clubs would be unduly enriched if they were repaid the VAT due to them. In order to support this argument HMRC requested additional time from the Tribunal so that they could employ an economist to ‘prove’ that this argument was correct.

The economist has completed his research and stated that there is some pass through of VAT to the non-members (pass through = tax borne by the non-member rather than the club absorbing the cost) and the rate of pass through this depends on the area, type of club and local completion.

On the back of this research HMRC are now contending that more than 50% of the economic burden of the VAT was borne by the consumer and that golf clubs would therefore be unduly enriched if repaid more than 50% of the VAT declared in error on green fees. Interestingly HMRC have also stated that they will submit that clubs would be unjustly enriched to the extent they are repaid more than 50% of the VAT claimed, indicating perhaps that HMRC simply intend to remit 50% of all claims.

It is unclear at this stage if HMRC will offer to pay up to 50% of the VAT claim due to clubs pending further litigation to decide the matter or if clubs will have yet another long wait while a further appeal on this specific point goes through the tribunal system and possibly on to the European Court of Justice to decide.

If you or your client is affected by the Bridport and West Dorset decision and have not yet made a claim it is not too late to do so, please give our free VAT helpline a call to discuss this further.

About the Author

The 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 gained in either HMRC or a Big 4 accountancy practice environment.

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 2015-01-28 09:01:24 in Tax Articles

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