A round of golf to become cheaper following tax decision against HMRC, says James Cowper
A round of golf is on the verge of becoming a little cheaper following a decision by the First Tier Tax Tribunal against HMRC.
The decision relates to VAT on green fees charged by members-only golf clubs on visiting golfers, and was brought by Bridport and West Dorset Golf Club. The Club argued that VAT on green fees, which are exempt from VAT for club members, should also be exempt from VAT for visiting golfers. HMRC disagreed and insist that VAT continue to be charged.
The First Tier Tax Tribunal agreed with Bridport and West Dorset Golf Club that supplies to non-members of green fees should be exempt.
Ruth Corkin, VAT Manager at James Cowper said: “This decision will be most welcome by golfers’ visiting members-only clubs – their game of golf should now be 20% cheaper.”
However, Ruth warns HMRC have responded by seeking permission to appeal to appeal to the Upper Tier Tax Tribunal.
“HMRC believes that the law has been incorrectly interpreted and intends to appeal the decision,” says Ruth. “Golf clubs should continue to charge VAT on green fees for visiting golfers and account for the tax in the usual way.”
HMRC has also stated that this decision is only binding with Bridport and West Dorset Golf Club and any claims made from other clubs will be rejected.
Ruth recommends that golf clubs having to charge and account for VAT on visitor green fees make what is known as a protective claim with their regular VAT payments.
She explains: “A protective claim will allow a club to successfully reclaim any VAT paid if HMRC lose its appeal, irrespective of HMRC’s wishes that this decision is binding to just Bridport and West Dorset Golf Club.”
Ruth Corkin, VAT Manager, James Cowper LLP, Tel +44 (0)1865 200500 or email rcorkin@jamescowper.co.uk
25.08.11