AGCO ramps up its tax campaign19th July, 2012 by Alistair Dunsmuir
The Association of Golf Course Owners (AGCO) is dramatically stepping up its campaign to put pressure on politicians to reform tax legislation in golf.
Earlier this month the organisation met with top Treasury officials who, it has now emerged, were either not convinced by its arguments or are not prepared to act upon them at this stage.
This week, therefore, AGCO’s chair, Vivien Saunders, emailed its members, encouraging both them and the members of their golf clubs, to contact their local MP. In tandem, the organisation is also set to appoint a new barrister to act on its behalf, while Vivien, herself the proprietor of two golf clubs, is contemplating withholding the payment of VAT in an attempt to force the government’s hand.
AGCO has drafted two letters to be sent, both of which highlight the distortion between the VAT members of private members’ golf clubs pay on their annual subscriptions, of zero per cent, and what members of proprietary clubs pay, at 20 per cent.
The first letter, from golf club owners, highlights Royal Lytham & St Annes Golf Club in Lancashire, which is currently hosting the Open. ‘It charges £247 for a visiting golfer to play there on a Saturday and £195 for a one night break in the club’s hotel,’ states the letter. ‘It is still considered to be non-profit making and not subject to commercial influence. The members enjoy VAT exempt sport and this isn’t fair on us as a business.
‘Many small proprietary golf clubs will be driven out of business unless the distortion is removed. Would you, as our MP, press the Treasury to deal with this issue? Unless the Treasury eliminates the distortion we will have no option but to take this long-running issue to Europe.’
The second letter, to be sent by golf club members, states that their club is run in almost exactly the same way as a private members’ club, but ‘golfers prefer to pay at a club where the fees are cheaper’.
‘Members at this club have left to go to member-owned clubs because of this,’ it adds. ‘Why should we pay 20 per cent VAT on our golf when members at nearby clubs pay no VAT?’
AGCO has also been liaising with Eamon McNicholas, a barrister at Temple Tax Chambers, and is asking its members to donate money towards his fees, in order for him to lobby the Treasury. Earlier this year the organisation raised over £40,000 to fund Michael Sherry, another barrister, to represent the golf industry in the Chipping Sodbury case. AGCO is still using Michael, but wants to keep his services to be centred on that hearing.
In addition, Vivien has been speaking with Eamon about the possibility of not paying VAT as a protest.
“I am contemplating withholding VAT to force HM Revenue and Custom’s [HMRC] hand,” she said.
“In my case I am considering withholding the VAT at Abbotsley Golf Club on our squash memberships, par three course membership, squash court fees for members and non-members, and the fees for the pool tables. These are all sports’ fees and should be exempt from VAT on the basis of the distortion. I have put this to Eamon McNicholas. It would mean withholding the VAT but would be trivial amounts that would not get us into financial difficulties if we lost against HMRC.”
The increase in the campaign seems to be due to the Treasury being unconvinced by AGCO’s arguments during the meeting earlier this month.
“The Treasury wont seem to admit that there is a distortion,” admits Vivien. “They suggest they need more evidence.
“We discussed the possible application of ‘reduced rate VAT’ of five per cent, but they were not enthusiastic about that. We discussed applying it only to golf or removing the VAT exemption only from golf, and we explained that England Golf should not be seen as the voice of the whole of English golf.”
Vivien added that she is set to have further meetings with politicians and Treasury officials later this year.
“Michael Ramsay from Stockwood Vale Golf Club has received an invitation to the Treasury and I may attend with him,” she said.
“I also have a meeting with Sir Bob Russell, an Essex MP, coming up, while Philip Dunne, an MP in Shropshire, has invited me to meet him.”