Brief 10 (2016) confirms that HMRC will now accept certain claims for VAT refunds from sports clubs following the First Tier Tribunal (FTT) decision in Berkshire & Others in December 2015. Previous briefs dealing with this area (Brief 25 (2014) and 19 (2015)) are therefore withdrawn.

In the case of Bridport & West Dorset Golf Club the CJEU found that the UK had incorrectly applied VAT to certain supplies made to visitors of non-profit making clubs. HMRC had subsequently denied repayment of VAT claims for overpaid VAT on the basis they would be unjustly enriched.

A number of clubs challenged HMRC’s refusal to pay out claims and appealed to the FTT. While the FTT found that the clubs would be unjustly enriched if HMRC paid their claims in full, it was not to the extent HMRC had considered. The FTT concluded the clubs would be unjustly enriched by 10% and were therefore entitled to a 90% refund of the VAT incorrectly paid. HMRC has decided not to appeal the decision and will be making VAT refunds, subject to claims meeting the terms of VAT Information Sheet 01/15. Details of how to make a claim are contained in the brief together with information on the implications for other taxes.

The FTT also considered the VAT treatment of corporate days and supplies to tour operators. It found that both supplies were taxable at the standard rate of VAT. It also found, on the facts of the cases, that VAT on golf course maintenance costs was an overhead of the clubs and was to be apportioned in accordance with a partial exemption method as appropriate. This may not always be the case, as the onus is on the club to demonstrate a link between its taxable activities and course costs, in order for such costs to be treated as residual.

The FTT determined that corporate days (supplies made to businesses who use them for their own purposes and so are the true beneficiaries), include green fees and any ancillary supplies (such as catering) supplied to the business concerned, irrespective of how they are constituted. Some clubs may refer to these taxable supplies as golf society days or by some other description, which is different from the VAT exempt society days described in VAT Information Sheet 01/15.