Tax barrister will represent golf clubs

One of the UK’s leading tax barristers has been employed to represent golf clubs in a tribunal hearing that could have major ramifications for golf in the UK.

On May 28, Chipping Sodbury Golf Club will argue against Her Majesty’s Revenue and Customs (HMRC) at a tax tribunal first tier that club membership is made up of a ‘package of services’, of which somewhere between 30 and 52 per cent is the provision of a facility for the ‘playing of sport’ and therefore exempt from VAT. The remainder includes other benefits of golf club membership, including discounts in the bar and pro shop, which would remain VAT-rated.

If the club wins then private members’ clubs could recover some of the VAT paid on membership subscriptions between 1973 and 1990, believed to be, on average, more than £100,000 each. Proprietary clubs could also recover some of the VAT paid on all their membership subscriptions since 1990 – potentially an even bigger windfall.

It would also mean that if, for example, the tribunal ruled that 40 per cent of golf club membership involved playing sport and was therefore zero-rated, then a club member’s annual subscription of £1,000 – of which currently £200 is VAT – would be reduced by £80.

The United Kingdom Golf Course Owners’ Association (UKGCOA) and the Association of Golf Club Owners (AGCO) have been separately raising funds – which needs to be more than £70,000 – from their members to pay for Michael Sherry, who is an eminent tax barrister. It is believed they have raised more than £55,000 between them.

According to Jerry Kilby, executive director of UKGCOA, Fred Cowgill, a VAT consultant who has been working with Chipping Sodbury, has instructed Michael Sherry to represent Mr Cowgill’s clients on the case, on issues of apportionment of subscriptions and distortion of competition, at the hearing (via pascal). It is not clear how Mr Sherry will be paid the outstanding shortfall – although it is possible that he has agreed to have payment of a percentage of his fees deferred.

“We now believe we have the best chance of success,” said Mr Kilby. “We are grateful to those members who have made pledges towards these costs. To date, we have received pledges of £16,650, and if anyone who has not contributed so far wishes to do so, please send an email to jerry.kilby@ukgcoa.com. Mr Cowgill will then send an invoice to you.”

However, he also added that, despite the common goal of UKGCOA and AGCO, which now appears to have been achieved, attempts for them to work together have failed.

“We have been trying very hard to find a way to work in close cooperation with AGCO,” he said. “Regrettably, our efforts to date have not been successful and we are keen to avoid any perception that UKGCOA is trying to take any credit for the good work that they have done in fighting tax inequality to date.

“We would like to wish the AGCO every success in the future.”

Vivien Saunders, chair of AGCO, added that it has been her organisation, and not UKGCOA, that has led the way on this battle.

“We have managed to raise or get pledges of something in the region of £40,000,” she said. “The simple fact is AGCO, which is a lobbying group, has far more support over this issue than UKGCOA. We reach lots more clubs and people.

“We have support from counties and clubs and have had contributions from all over the United Kingdom. We do not charge any membership fee, do not pay anyone a salary or expenses and are all doing this as volunteers.

“Any donations we receive go directly to Michael Sherry and certainly not to a third party.

“However, I strongly object to the suggestion that AGCO and the UKGCOA are unable to work together on this. It is utter nonsense. I hope they will stand with AGCO and not against us.”

Any club interested in donating to AGCO should email viv@viv.co.uk.