If your golf club provides accommodation you will need VAT advice following this landmark ruling

Alistair Dunsmuir
By Alistair Dunsmuir August 22, 2014 10:01

A VAT adviser has warned all golf clubs that provide accommodation that they should seek advice following a landmark ruling against one club in London. He has also said you should not use the word ‘holiday’ in any paperwork if you want the property to be exempt from VAT.


Lodges are a growing trend on golf courses. Image by Dana Moos.

Richmond Park Golf Club supplies lodges to third party owners, has timeshare agreements with various owners of apartments on its land and employs a managing agent to provide management services to all its properties.

HMRC recently ruled that all these properties are ‘holiday accommodation’ and therefore the annual service charges levied to their owners are liable to VAT at the standard rate.

The golf club appealed, stating that the properties were not holiday accommodation as, for instance, they can be owned 52 weeks a year, and that if they were, then commodities such as water and golf privileges should not incur VAT. However, HMRC only removed its ruling to some of the properties that had no occupancy restrictions, Richmond Park appealed and the case went to court.

The First Tier Tribunal Tax Chamber ruled in HMRC’s favour on both counts and has dismissed the appeal.

“If you have accommodation units that are subject to residency restrictions or are held out as holiday accommodation, and charges such as maintenance or rent are not subject to VAT, take VAT advice to make certain the treatment is correct,” said Adrian Houstoun, a VAT specialist at Kingston Smith LLP.

“If you have accommodation units and you want the charges to be VAT-free, make certain there is not a residency restriction in the planning, that the word ‘holiday’ is not used in the paperwork, and that the units are not advertised as holiday accommodation.

“If the accommodation is holiday accommodation and you want to act as an agent for such things as water and sewerage, the water or utility must be measured to the end user and charged accordingly, and the account should not be in the name of the management company.

“Even such things as TV licences should not be in the name of the management company – or the golf club, as they were in this case.”

The full ruling can be viewed here.


Alistair Dunsmuir
By Alistair Dunsmuir August 22, 2014 10:01
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1 Comment

  1. Philmac August 22, 13:07

    When are the revenue going to catch up with other “non profit making” members clubs with hotels ? I do believe that Royal Lytham have a hotel, if it does not make a profit how does it pay its’ staff? and why?
    Perhaps the fact that they can charge nearly £400 for dinner bed and breakfast at off peak times is the reason, even better when the VAT man doesn’t get a bite of the cake and no doubt there is no corporation tax as they are a “non profit making” members club.
    I couldn’t get planning permission for a hotel at my club but maybe if I applied for a “dormy house” I would have better luck.
    photo of the dormy house hotel attached(it is bigger than most club houses

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