Widening the scope of exemption for certain sports

23rd April 2015

HMRC changed UK VAT legislation with effect from 1 January 2015 which has widened the scope of certain sports related VAT exemptions. This was followed up by the issue in February of HMRC VAT Information Sheet 01/15 in reference to the Bridport and West Dorset Golf Club Limited VAT case, which was ultimately won by the taxpayer. Whilst the Bridport VAT decision dealt primarily with the VAT treatment of non-members’ green fees by a golf club, the impact of the VAT change is broader as it also covers certain charges relating to sporting services provided to non-members by members’ sporting clubs which are organised on a “not for profit” basis.

The law change will affect all clubs that charge non-members for ‘qualifying’ sporting activities and while there may be opportunities for retrospective claims prior to 2015 HMRC will look at whether such claims create “unjust enrichment” for the club in which case essentially no refund will be made to the club.

It is recommended that affected clubs review their historic position with regards VAT recovery and the impact, if applicable, of the Capital Goods Scheme which applies to buildings, land, refurbishments, extensions etc. in the last 10 years that have cost over £250,000 plus VAT. The range of clubs affected will include riding, shooting, cricket, football, gymnastics, swimming, motorsports, fitness and exercise, sailing, rugby, archery; please note that this is not an exhaustive list.

For further information please contact andrew.norris@centurionvat.com

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