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Court ruling could spell VAT refunds for golf clubs

January 30, 2014

A landmark ruling by the European Court of Justice could have a significant impact on the tax affairs of private members' golf clubs up and down the country.

The court ruled on 19 th December 2013 in the long-running case of Bridport and West Dorset Golf Club that green fees charged by private members' golf clubs should be exempt from VAT. 

Chartered accountants Duncan & Toplis say this is a significant ruling that could have major ramifications for the industry and could potentially mean refunds of VAT dating back four years.

"The issue in dispute was whether or not green fees charged to visitors should be treated as exempt from VAT," explained Christine Newitt, VAT Partner at Duncan & Toplis.

"HMRC argued that green fees should be taxed, but Bridport and West Dorset Golf Club argued that UK VAT legislation was more restrictive than the European legislation for non-profit making bodies and that the green fees were not 'additional income' and should therefore be exempt from VAT.

"From reading the case we think it will be difficult for HMRC to interpret the judgement in a way as to not pay out any outstanding VAT claims and we eagerly await their response. 

"A press release from HMRC is anticipated shortly to determine the processing of back claims and the position relating to new claims on the back of this decision."

The European Court of Justice found that all supplies of the facility to play golf provided by non-profit making clubs must be exempt from VAT and that there can be no exclusion from exemption by reference to green fees being income not arising directly from memberships.

It also held that it is not possible to apply a general exclusion which narrows the scope of the exemption as provided on the face of European legislation.

If your golf club has not already submitted a claim to recover VAT paid on non-members' green fees, or if you need assistance with assessing the impact of this decision in receiving additional VAT exempt income in the future, contact Christine Newitt on 01205 310250 or email .

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