The above brief announces a change in HMRC policy following the First Tier Tribunal (FTT) decision in the case of Goals Soccer Centres plc. This applies to all organisers of sports leagues and competitions in circumstances where pitches and league/competition management services are being supplied.

The FTT found that there were two separate supplies being made:

• a supply of land (the pitches) which was exempt as the relevant conditions were met, and
• a supply of administration and management services which was standard rated.

HMRC accepts that the decision of the FTT is applicable to all traders who operate in circumstances akin to Goals Soccer Centres plc. including traders who hire the pitches from third parties such as local authorities, schools and clubs. However, exemption will only apply where there is a series of lets in accordance with the relevant conditions.

Where a single price is charged to the customer, businesses will need to determine the value of the two different supplies to establish the correct amount of VAT due. Whatever method is adopted to do this, there must be sufficient documentary evidence kept to show how a business has arrived at a fair and reasonable apportionment. The business will also need to consider how much of the VAT it incurs is deductible.

More information is available in the Brief here.