Sporting services and VAT

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HMRC have published a brief explaining their change in policy following the Court of Justice of the European Union (CJEU) decision in Bridport and West Dorset Golf Club Ltd (C-495/12), in particular, with regard to the treatment of supplies of sporting services by members" clubs to non-members.

The CJEU, in the Bridport case, ruled that VAT exemption applies to green fees charged to visiting non-members by Bridport and West Dorset Golf Club Ltd (the Club), a not-for-profit member-owned golf club.

Under existing UK law, where a body operates a membership scheme, any supplies to individuals who are non-members are excluded from the VAT exemption on the basis that the fees received represent "additional income" for the purposes of EU Law. The CJEU disagreed with this approach, taking the view that a member state has no power to exclude certain groups of recipients of services from the benefit of the VAT exemption and "additional income" could not be construed in such a way that it would lead to such a restriction in the scope of the exemption.

As a result of the CJEU judgment, HMRC has conceded 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.

In light of this change in policy, HMRC will refund overpaid VAT to members" clubs that decide to reimburse non-members who were incorrectly charged VAT on sporting services supplied to them under reimbursement arrangements explained HMRC Notice No. 700/45 "How to correct VAT errors and make adjustments or claims".

HMRC are also 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.

HMRC say that previously rejected claims for overpaid VAT will remain open only if they were appealed to the First-tier Tribunal. Where claimants of rejected claims have not appealed, the claims cannot be resubmitted and the any claims will be treated as a new claim subject to the four-year time limit.

Legislation will be passed by 1 January 2015 to reflect the change in HMRC policy to comply with the decision of the CJEU.

HMRC’s brief is available at

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