AGCO chair calls for affiliation fee delay

Alistair Dunsmuir
By Alistair Dunsmuir February 8, 2016 12:05 Updated

The chair of the Association of Golf Course Owners (AGCO) has called for golf unions’ collection of affiliation fees to be delayed until their constitutions are amended.

Vivien Saunders was commenting on a First-Tier Tribunal tax chamber ruling made at the end of 2015. England Golf is currently not making any response to her call as it is waiting for advice from HMRC and expects an appeal to be lodged shortly, however one industry insider says the ruling means nothing has actually changed.

vivien saunders


All members of golf clubs affiliated to England Golf, Scottish Golf, the Ladies’ Golf Union or the Golf Union of Wales pay an annual levy to their national and county golf unions as part of their club subscription. The amount varies from county to county and by the number of members each club had in the previous year.

The ruling stated that ‘the appellant [Saunders] and HMRC are in agreement that affiliation fees are not disbursements under the letter of the law. HMRC agree the fees are not incurred by the clubs in the name of specific identifiable members and that the responsibility for payments rests with the clubs rather than the individual members. There is thus no disputed issue for the tribunal to resolve and in any case the agreed position is entirely consistent with the findings the tribunal has made on the evidence before it.’

According to Saunders, this means “that affiliation fees to England Golf and county golf unions cannot be treated as disbursements. In other words owners of proprietary clubs cannot pass the fees on to their golfers VAT exempt. The constitutions of England Golf and those county golf unions that have followed them are wrong.

“England Golf and county unions should immediately take steps to correct their constitutions. They should take out any reference to affiliation fees as disbursements. It also means that proprietary club owners can no longer collect and be liable for affiliation fees for counties and England Golf. They cannot pass on the fees as VAT exempt disbursements.

“Until constitutions can be corrected and unions adopt a method for collecting fees direct from golfers the collection of 2016 must be left in abeyance. In particular it is essential that unions do not attempt to raise invoices to proprietary clubs for 2016.

“The England Golf constitution, followed by most counties, has clearly said that the liability for the fee is that of ‘the club’ and not the golfer. In other words, if a golfer does not pay, the club must pay for him. It is now clear that the collection of affiliation fees for counties and England Golf must be delayed until constitutions are changed, reference to ‘disbursements’ is removed and some mechanism for collecting fees direct from golfers can be adopted. And the same clearly applies to the Golf Union of Wales, Scottish Golf and the Ladies’ Golf Union, which all follow the principle of the club being liable for the fee. Now it must be individual responsibility.”

However, England Golf, along with all the home unions, has written to HMRC to ask for its views on the outcome of the ruling, and is currently awaiting a response, which has been promised shortly. The organisation is not currently making any statements due to the likelihood of a forthcoming appeal.

One industry insider had a very different interpretation of the ruling to Saunders however.

“There is an extra statutory concession granted by HMRC in 2000 which the tribunal acknowledges within the ruling,” he said. “Although not true disbursements, all clubs can treat the recharge as if it were a disbursement without VAT.

“It is entirely up to clubs whether they pay the fees themselves or seek to recoup some of the cost by passing it on to members.

“If a club chooses to pass on the cost by charging it on to individual members then the strict legal position is that any such charge would be exempt from VAT for a members’ club, and subject to VAT for a proprietary club because they are not true disbursements. But, by concession, all clubs can charge members and treat the recharge as if it were a disbursement and therefore without the addition of VAT. This is made clear in paragraph 109 of the decision.”

Judge Swami Raghavan states in the ruling that the question of whether HMRC is entitled to issue such an extra statutory concession “is not something which is within this tribunal’s jurisdiction”, he added.


Alistair Dunsmuir
By Alistair Dunsmuir February 8, 2016 12:05 Updated
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