Private golf clubs attacked over tax affairs

Alistair Dunsmuir
By Alistair Dunsmuir March 1, 2012 10:23

A proprietary golf club has joined forces with a former women’s Open champion and launched an attack on a number of UK private members’ golf clubs over their tax arrangements.

As private members’ clubs do not distribute profits to incorporators, shareholders, directors or officers, they pay less corporation tax than proprietary clubs, which do. This has led to criticism from non-private members’ clubs over a lack of a level playing field when in it comes to investing money in the club’s facilities.

The Twitter feed of Trent Park Golf Club in north London, @trentparkgolf, has contacted Golf Club Management to say that ‘a lot of private golf clubs should die. There are too many, they aren’t paying corporation tax and most are ripping off the taxman.’

Some wealthy clubs in south east England were singled out by Trent Park as being the worst offenders.

The comments follow a meeting of the Association of Golf Club Owners (AGCO) at Abbotsley Golf Club in Cambridgeshire two weeks ago. AGCO describes itself as ‘a voice for owners of golf courses and their members, continuing to fight the unfair treatment of VAT and tax that is crippling the proprietary golf sector in the UK’. One of the items on the agenda at the meeting, hosted by former British women’s Open champion and founder of the Women’s Professional Golf Association, Vivien Saunders OBE, was ‘corporation tax – a century of evasion; the worst offenders’.

It is believed that, at the meeting, Vivien mentioned the clubs that Trent Park singled out, as she cited all of them in a letter to justice minister Jonathan Djanogly MP last year.

In the letter she stated ‘extraordinarily wealthy golf clubs don’t pay tax … £8.3 million of green fees at one since 1999 … we have never found a members’ club paying any tax on their green fee income, other than some negotiated pittance’.

She even added that John Cruddas, MP for Dagenham, receives a £700 discount on his subscription of one such club. “It smacks of favouring those with influence,” she stated.

Trent Park Golf Club added: “Private members’ golf clubs are evading corporation tax due on non-members’ visitors’ income by calling them ‘temporary members’. Corporation tax laws on non-member income already exists. They are just not being enforced by HMRC and auditors assist the cover up by private members’ clubs.

“If non-member green fee and society revenue is profitable, corporation tax is due, but none is paying it. If it’s not profitable, why do they do it?”

Last year Burhill Golf and Leisure, which runs several golf clubs for profit, stated that the corporation tax system does not need to be changed, but that the VAT rate for proprietary-run sports organisations should be removed on activity-based income, as is currently the case for private members’ clubs, which Vivien Saunders has also campaigned for.

“Commercial organisations already pay corporation tax which private members’ golf clubs do not – and this should be sufficient,” said chief executive Colin Mayes. “But we are all sports facilities and use various income streams to maintain and improve our facilities for our customers’ benefit. Clearly the commercial clubs are losing out quite considerably.”

Alistair Dunsmuir
By Alistair Dunsmuir March 1, 2012 10:23
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  1. HC (@verdant_r) March 6, 06:18

    That’s 1/3rd of your membership think they need some support

    Reply to this comment
  2. Richard Roberts March 5, 11:32

    I operate one of the 800+ proprietary golf clubs in the UK and like most of the others am completely fed up with what is happening.

    The EGU wanted money of all clubs to establish a fighting fund for the VAT case, this money has now gone and the company who administered it closed. Turns out the money was to support a case to the advantage of private members clubs and not proprietary clubs! The EGU failed to mention that to the proprietary that contributed.

    All private members clubs in my area are now welcoming guests, visitors and societies most days of the week. I have no problem with this at all. My problem is that all local clubs are operating at around the same price as we are, £15 per round. I have to pay 20% VAT on everything, local clubs are making people temporary members and not paying any VAT. It is now cheaper in this area to play most of the private members clubs at weekends than what it is to play on some of the local municipal courses.

    I accept that times are hard in golf at the moment and most courses are a long way down on memberships but if all clubs are competing for the same golfers business surely all clubs should be treated in the same way by the taxman! How can a business be expecting to let its competition have a 20% start and still compete?

    I have seen the report compiled by AGCO and accounts from dozens of ‘members’ clubs and it doesn’t matter which way you look at it, what is happening is wrong and it needs to be changed.

    Then there is the matter of clubs claiming CASC which is another story in itself!


    Reply to this comment
  3. Andrew Smith March 2, 17:39

    I was at the Abbotsley meeting –

    We need all proprietary clubs to be more proactive and act together. Join AGCO (it’s free!)

    Reply to this comment
  4. Andrew Smith (@ANDYKS1) March 2, 17:28

    » Private golf clubs attacked over tax affairs

    Reply to this comment
  5. Steve Tolcher (@Stegsie) March 1, 19:03

    » Private golf clubs attacked over tax affairs

    Reply to this comment
  6. Mark Harrhy March 1, 11:50

    One of our local members clubs does not even show green fees on there books, they show temporary membership! Theyre even fiddling a good thing!

    Reply to this comment
  7. FairTaxForAll (@FairTaxForAll) March 1, 10:40

    Good on @trentparkgolf – corporation tax should be fair throughout the sport sector

    Reply to this comment
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