Early Christmas gift for Golf Clubs?

HM Revenue & Customs have issued an update on their position on the outcome of the Tribunal hearing on the Bridport Golf Club VAT claim, which involves the VAT liability on Golf green fees. HMRC’s position is that to simply repay to Golf clubs the full amount of any claim could result in an ‘Unjust Enrichment’ benefit to the Golf Club, and they also maintain that Corporate Golf Days should still be liable to VAT at 20%, even though the provision of rounds of golf by non-profit making organisations are exempt from VAT.

Revenue & Customs Brief 19 (2015) offers to repay, to clubs which have made a claim, either 50% or 33% of their claim, subject to certain conditions. Clubs must confirm they have checked their claims and adjusted where appropriate in line with HMRC view which is given in VAT Information sheet 01/15, and the Club must confirm that they would like an interim payment. The % payment depends on the level of green fees per person per round – over £100 and payment is 33%, while under this level 50% is paid. The percentage is based on HMRC ‘s view of what a club is likely to be entitled to even if HMRC are successful at the Tribunal, and in their opinion if green fees are over £100 then the Golf Club has more ability to pass on to customers the VAT cost.

Many golf clubs have previously made claims which are pending waiting for the Bridport case decision, and an offer like this from HMRC will be viewed favourably by many clubs, even if viewed with some suspicion. It does not appear to be a payment to bring matters to a conclusion, as if HMRC do lose at Tribunal then Clubs are likely to be due further repayment, over and above the 50% or 33% offered. Bearing in mind that claims can exist that go back to 1973, most clubs would be pleased to see this reach a final conclusion, and should consider this offer from HMRC as a step towards that end.

This is a very complicated situation – evidenced by the fact that the original Bridport case was heard in 2011, and still drags on, for what seems a fairly simple matter. Golf Clubs should review their claims and decide if any amendments should be made to qualify for the interim payment offered by HMRC at this stage, or wait until the Tribunal decision is arrived at, which may take some time. Is a bird in the hand worth two in the bush – or rough to use golfing terminology?