Landmark VAT green fee ruling for clubs

Seamus Rotherick
By Seamus Rotherick March 22, 2012 03:46

A British private members’ golf club has been paid £5,000 after it won a landmark VAT ruling that could result in non-profit making clubs restructuring their membership offerings.

HM Revenue & Customs (HMRC) has accepted that the golf club – which does not wish to be named – overpaid VAT over more than three years on green fees that associate members purchased.

In 2009 the club set up the flexible / associate membership scheme in which golfers paid a small fixed fee to join the club and then paid discounted green fees whenever they wanted to play a round of golf.

Non-profit making private members’ clubs currently pay no VAT on members’ subscriptions, but do pay VAT on green fees, albeit this may be changed at a legal hearing later this year.

Last year the club appointed a team of accountants and VAT consultants from PKF to challenge the VAT it had charged on the green fees its associate members had bought. They stated that, according to the Value Added Tax Act 1994, VAT should only be levied to ‘an individual who is not a member’ of a sports’ club when they purchase green fees.

HMRC has now accepted the challenge. “From March 2009 Didsbury introduced an annual associate membership classification in which members pay an annual membership fee and then additional fees each time they use the course,” said an HMRC spokesman.

“Both sets of fees incurred by the associate members qualify for exemption from VAT under the VAT Act 1994. The annual fee has been correctly treated as exempt but the course fee element has been incorrectly treated as VAT inclusive.”

A spokesman for PKF said: “As a result of this finding, it is recommended that non-profit making clubs that don’t have these flexible or associate membership schemes should consider the implementation of such schemes as, in addition to the VAT benefit, there are clear commercial benefits in doing so.

“Clubs that have been operating these schemes and have paid VAT on the green fees can now make a claim for the VAT they have overpaid. Clubs are being advised to make a specific request to HMRC on an individual basis if they consider they would be eligible to make a claim.”

Last year Bridport & West Dorset Golf Club won a case against HMRC to claim back the VAT it had spent on green fees for non-members of the golf club, but HMRC appealed the decision, which is due to be heard this July. If the appeal is unsuccessful then private members’ clubs will be able to claim back four years of VAT paid on all green fees. However, even if the appeal wins, private clubs now know they can set up a scheme that makes them exempt from paying VAT on green fees.

Seamus Rotherick
By Seamus Rotherick March 22, 2012 03:46
Write a comment


  1. Hart Common G C (@HartCommonGC) March 22, 23:31

    » Landmark VAT green fee ruling for clubs

    Reply to this comment
  2. John March 22, 21:59

    Didsbury golf club also pay very little in rates as they claim CASC. I wonder what they do for the local community to claim the CASC besides keep them off the course? Some of the surrounding areas are pretty hard up. Or is all their community work done a bit further afield around Wilmslow and Alderley Edge? Is this what CASC was intended for?

    Reply to this comment
  3. neville drumm (@nevdrumm) March 22, 21:15

    Private members’ British golf clubs can now avoid charging 20% VAT on green fees: @RedditchGolfC food for thought! 🙂

    Reply to this comment
  4. Dave Rimmer (@rimmer19) March 22, 16:44

    @GolfLancaster Read on… Private members’ British golf clubs can now avoid charging 20% VAT on their green fees:

    Reply to this comment
  5. Alistair Dunsmuir March 22, 15:25

    John – we’ll be doing a follow up story in the next few days featuring the proprietary sector’s response to this development

    Reply to this comment
  6. John March 22, 15:19

    I received the original article in an email this morning so I would assume there are 100’s of others now in circulation around proprietary clubs in the UK. Everyone knows it’s Didsbury golf club but to take the comments from the proprietary club out of the article is not good.

    Reply to this comment
  7. Golf Widow March 22, 14:42

    @abelard – it’s Didsbury Golf Club – my husband is an associate member there.

    They pay £65 a year – more than a fiver! – but still very good value for money, especially as the green fees should now come down!

    Reply to this comment
  8. The GolfPlan Team (@golfplanuk) March 22, 14:31

    Landmark VAT Green Fee Ruling for Clubs

    Reply to this comment
  9. abelard March 22, 14:19

    The golf club doesn’t want to be named?

    A club could charge £5 to join and then that’s 20% off all green fees for the rest of the year!

    Reply to this comment
  10. Proprietary Club March 22, 14:08

    This is a crushing blow for the 800 proprietary golf clubs desperately trying to compete with the aggressive commercialisation of the green fee business by private members’ golf clubs who already unfairly benefit from CASC legislation and light touch regulation of their corporation tax returns on visitor income.

    The only positive thing to come from this ruling is that it must bring closer the day when HMRC finally recognises the unsustainable distortions caused by the different VAT treatment of private clubs and commercial golf operators, who are selling an identical product, and persuade them to remove the VAT exemptions from the whole sector in accordance with EU legislation against VAT exemptions causing distortions.

    With over 500 private clubs now openly competing online with commercial clubs for green fee business in order to subsidise their annual subscriptions, the present situation is untenable. If HMRC do not remove VAT exemptions from golf soon then the commercial golf sector is doomed and the tax base from this important industry will be further eroded.

    Reply to this comment
  11. Adam Pounds (@tillersturf) March 22, 12:33

    » Landmark VAT green fee ruling for clubs Wow, this could change the industry!!

    Reply to this comment
  12. Ellie Parry (@groundsmaiden) March 22, 11:56

    Landmark VAT green fee ruling for #golf clubs that could transform the industry

    Reply to this comment
  13. Adrian Stiff March 22, 11:47

    Vivien, I take the view that it is good news not disaster as it is more likely that proprietary clubs will now win the case, now that this has been awarded. All golf clubs will be aligned fairly eventually and this ruling will make yours/our jobs easier. You are doing a great job by the way and best regards. Adrian

    Reply to this comment
  14. Vivien Saunders March 22, 09:27

    This is a disaster for proprietary clubs. At Abbotsley we got this ruling in 1996 but kept quiet about it. The only thing now is to get the VAT exemption removed altogether for sport and get it replaced with a uniform 5%. The English Golf Union will doubtless be rejoicing that small proprietary clubs will eventually be killed off. They, like other governing bodies in golf, only support members’ clubs.This was always a disaster waiting to happen. We have warned the Government of this scenario since 1993. It is simply what squash clubs have always done – small membership and pay ever time you play. The problem is that the Treasury and Sports council think that “non-profit making” has something to do with charity and philanthropy and that is why they give exemptions to these clubs. They are so out of touch that they think a golf clubs taking over £1 million a year in green fees is non-profit making. Quite absurd. Good the price of farmland is now increasing dramatically. That’s where many golf clubs will finish up!

    Reply to this comment
View comments

Write a comment


Join Our Mailing List

Read the latest issues

Advertise With Us

For editorial enquiries in the magazine or online, contact:

For advertising enquiries in the magazine or online, contact:

Social media