David Cameron asked to review his club’s tax affairs27th June, 2013 by Emma Williams
The founder of the Association of Golf Course Owners (AGCO) has called on the prime minister, David Cameron, to review the tax affairs of a golf club he is a member of.
Vivien Saunders OBE, a former British women’s golf champion who now owns two golf clubs and has campaigned on tax issues in golf for a number of years, has written an open letter to David Cameron.
In it, she claims that Ellesborough Golf Club in Buckinghamshire “may be escaping the tax they owe and may have escaped it for many years”. On the register of members of parliament’s interests, the prime minister declares that he has accepted honorary membership of the club, worth £1,221 per year. Ellesborough has offered honorary membership to every prime minister for the last 100 years.
Saunders, who has accused a number of leading private members’ golf clubs of tax evasion over the last 20 years, says that members of the club do not have to pay VAT on their subscriptions, because it is a ‘non-profit making’ venue. However, she added that the club competes with proprietary golf clubs, where members do have to pay VAT on subscriptions, for visitors’ green fees, which, she said, “is distortion”. She also said that the club uses an accountant that has boasted that it has reduced some golf clubs’ taxable income “to zero”.
“Less well-to-do golfers at nearby Aylesbury Vale Golf Club pay VAT,” she wrote. “Clubs like Ellesborough trade on the open market for visitors and golf societies, advertising their wares on the internet and in various publications.
“A visitor’s fee at Ellesborough is £48 for a round or £72 for a day. We are not aware of Ellesborough’s disclosure of these earnings or the tax they pay. Their auditors / accountants are Hillier Hopkins, who proudly say that they act for over 30 golf clubs and ‘have in almost all cases been able to either agree mutual trading status or a profit calculation method which reduces taxable income to zero’.
“From that we assume that Ellesborough Golf Club may be escaping the tax they owe and may have escaped it for many years.
“We now ask that you review the way in which their tax is dealt with.”
Andy Hayes, general manager of Ellesborough Golf Club, responded to the letter by saying: “I can confirm that our affairs conform to the rulings and guidelines of HMRC.”
Saunders also said that some private members’ golf clubs bring in hundreds of thousands of pounds in untaxed green fee income each year, because visitors are treated as ‘temporary members’ and therefore exempt from the tax.
“The term ‘temporary member’ is used by clubs to disguise their trading income from prying eyes,” she wrote.
“We say it is evasion. Trade and pay the tax you owe, or shut your doors.”
Saunders has asked several AGCO members to forward the letter to their MP, so that a number of ministers will be aware of her comments. Last year she met with David Gauke MP, exchequer secretary to the treasury, to discuss what she calls ‘VAT distortion in golf’.
Not all in the industry agree with Saunders, however. A spokesman for one private members’ golf club said: “The argument that proprietary golf clubs lose out to private clubs is flawed because it overlooks a fundamental point regarding the ability to claim back input VAT incurred on operating costs.
“A proprietary club as a registered business can offset all input VAT incurred.
“A private club is only allowed to reclaim a proportion of VAT incurred that typically amounts to 30 percent. Because this is a cost to be borne, club subscriptions have to be increased to cover the amount.”