HMRC finally accepts VAT ruling – but says it will restrict payments to members’ golf clubs
HM Revenue and Customs (HMRC) has finally accepted a 2013 European Union ruling that green fees at private members’ golf clubs must be exempt from VAT and has said that it will pass new legislation on it by the end of this year.
However, the tax authority has said that it intends to restrict repayments to golf clubs unless they pass the money they receive back to the golfers who bought the green fees in the first place. It has also failed to give any idea of a timeline for when clubs will receive money if they choose not to pass the refunds on.
The tax authority, which has been widely criticised for a lack of response to the ruling, has said it will split claims for repayments for overpaid VAT into two categories.
The first category will be golf clubs that will pass on the refund they are due to the visiting golfers who paid green fees at their clubs, which could be as few as zero.
“HMRC will meet eligible claims under the terms of sections 9 and 10 of Notice 700/45 providing that clubs demonstrate that they have made arrangements to reimburse the VAT to non-members who actually paid it, and make a legally binding commitment to do so in a timely manner,” said a spokesman.
The second category will be for golf clubs that do not intend to pass their repayments on to golfers. Hundreds of golf clubs, hoping to claim hundreds of millions of pounds of money in overpaid VAT from the taxpayer, fall into this category. Here, HMRC has given no indication when they will get the money.
“HMRC are examining the scope for restricting repayments to clubs not making arrangements to reimburse the paying non-members to avoid the unjust enrichment of members’ clubs. Further advice will be issued on these claims after a conclusion has been reached on this point,” said the spokesman.
Many proprietary clubs have called for private members’ clubs to pass the refund on to the golfers who paid the green fees, although most private members’ clubs said they took the VAT hit rather than the golfers did, anyway.
HMRC’s announcement comes just days after one body representing proprietary golf clubs made an application to have the EU ruling thrown out.
The manager of one private members’ club said he was disappointed with ‘HMRC’s latest delaying tactics’, but was pleased that the authority had finally accepted the EU ruling – nearly six months after its Irish counterpart did.
In a statement on its website, the authority says: ‘HMRC accepts that supplies of sporting services to both members and non-members of non-profit making sports’ clubs qualify to be treated as exempt from VAT, provided that the services are closely linked and essential to sport and are made to persons taking part in sport.’