HMRC withdraws EU VAT appeal
Golf Club Management editor Alistair Dunsmuir argues that HMRC’s withdrawal of its appeal regarding the European Union’s ruling that private members’ golf clubs’ green fees must be VAT exempt will lead to more negative news stories for the golf industry.
Sometimes big stories don’t get the announcement you think they should deserve.
Tucked away last Friday on page 38 of the Tax and Chancery Chamber of the Upper Tribunal’s weekly forthcoming hearings, sandwiched between HMRC’s dismissed appeal against a doctor and a struck out case by a newsagent against HMRC, are the words ‘The Bridport and West Dorset Golf Club Limited – Appeal Withdrawn’.
Yet those words will mean that hundreds of, in some cases very wealthy, private clubs, will now be given scores of millions of pounds of taxpayers’ money.
In December, after years of legal wrangling, the Court of Justice of the European Union ruled that the charges, or green fees, that visitors to some British golf clubs pay to play golf should be exempt from VAT, due to the legal definition of what represented ‘additional income’ for a club that is officially not-for-profit. Last Friday HMRC officially withdrew its appeal against the decision.
While this will be a lifeline for several golf clubs that have struggled through the economic downturn, to the public it will mean that the exclusive golf clubs owned by their members that they love to hate, the ones most likely to not allow women to join or establishments that will throw you out if you’re not wearing a jacket and tie, can claim rebates worth anywhere between £115 million and £500 million, according to analysts’ predictions.
The taxpayer will have to fork out six-figure payouts to many of these golf clubs, with some rebates stretching back as far as to 1990.
It wont just be the public that will have a negative perception about this. Almost half of the UK’s golf clubs are owned by individuals or businesses that have already complained about a VAT distortion because their members pay VAT on their subscriptions, whereas members of private golf clubs do not. Even though, in some cases, the only other obvious difference between the two clubs is a road that separates them. Some proprietors have said that this ruling will be the final nail in their clubs’ coffins.
And golfers aren’t best pleased either – it was them, after all, who paid the VAT to play the courses, but there is no legal imperative on the clubs to pass the rebate back to them, despite calls from various groups that they should.
Golf gets a rough ride in the media because of its perceived exclusivity. Last year the BAFTA-winning television programme The Revolution Will Be Televised visited and mocked Royal St George’s Golf Club in Kent, because of its refusal to allow women to join, stating that ‘is it really gentlemanly to exclude half the population as members of these clubs?’ What wasn’t mentioned was that less than one percent of golf clubs are single-sex.
The media is also reluctant to highlight the studies in recent years that have shown that playing golf regularly can reduce your chances of suffering from heart disease and strokes, and it tends not to report on the clubs that are community hubs, providing social nourishment to all sorts of members of society who could otherwise be lonely or attracted to socially unacceptable activities. You also wont read about the clubs that are custodians of their local environments or give thousands every year to needy charities in anywhere other than the local or trade press.
This ruling will do nothing to improve the disparity between the perception and the reality of the golfing industry. Even if some clubs use the rebate to provide an affordable leisure activity to people who need it, the headlines will be ‘Millions of your money is paid to rich golf clubs’.