‘Clubs should pass VAT refund to golfers’9th January, 2014 by Tania Longmire
The chair of the Association of Golf Course Owners (AGCO) has said that all UK private members’ golf clubs should hand whatever VAT refund they receive, following the recent landmark ruling, back to the golfers who paid green fees at their clubs.
In December the Court of Justice of the European Union (CJEU) ruled that green fees at British private members’ golf clubs must be exempt from VAT, meaning that those clubs can apply for a refund from the government that should collectively be worth millions of pounds. Some clubs have even stated that the windfall could prevent them from closing down following several financially difficult years.
However, Vivien Saunders OBE, chair of AGCO and owner of the proprietary Abbotsley Golf Hotel and Country Club in Cambridgeshire – which is not affected by the ruling – has written to eight private members’ golf clubs and asked them to list green fee payments going back at least six years. She said the money should then be passed back to visitors from her club and that the letter applies to all British private members’ clubs.
“The European court has ruled that green fees payable at members’ club should have been treated as VAT exempt from January 1, 1990. This means that VAT was wrongly charged by members’ clubs to their visitors from that period onwards,” she wrote.
“Many of the members at Abbotsley have paid green fees at your courses. Those green fees have wrongly included VAT. For the period when the VAT rate was 17.5 percent the amount of VAT included in a green fee equates to 14.89 percent and for the period when VAT was 20 percent, the VAT included is one sixth.
“I feel duty bound on behalf of our members to ask what refunds you propose to make to them individually. Presumably your green fee records clearly show the players from Abbotsley who played on your courses under the county card scheme. You should therefore be able to list those green fee payments. We presume that you have accurate records of the payments made to you by our members going back at least six years. Please provide a list of all those payments so that I can discuss with our treasurer how we can facilitate the VAT refunds. To that end we can provide you with a current list of Abbotsley members to enable refunds to be made.”
A spokesman for one private members’ club said he would not be responding to Vivien Saunders.
The development comes as a spokesman for the Wessex Amateur Golf Tour, which organises golf competitions for green fee paying golfers, has said that its members should be refunded and that it will boycott members’ clubs that do not reduce their green fees in 2014 by the VAT amount.
Meanwhile, tax expert Adrian Houstoun has said HMRC is set to make a statement about the VAT refund shortly.
“It is hoped that HMRC will issue a briefing in connection with the case shortly, so it may be worth waiting for one. Any clubs that have accounted for VAT on visitor green fees and not already made a protective claim should consider doing so,” he said.
“The visitor green fees that are now exempt will reflect on the club’s partial exemption calculations. VAT incurred on expenses solely in respect of the playing of golf, for example on course equipment and maintenance, will be potentially irrecoverable. The increase in exempt income is likely to reduce the amount of input tax recovered on expenses and overheads.
“If you think you may be impacted by this ruling, take professional advice.”