Several private members’ golf clubs have now received overpaid VAT refunds

Alistair Dunsmuir
By Alistair Dunsmuir November 3, 2016 15:58

Several private members’ golf clubs have now received overpaid VAT refunds

Approximately 25 per cent of the golf clubs that had claimed for VAT rebates on green fees via KPMG have now received the money back from HMRC.

Paul Stewart, Indirect Tax Director at KPMG, which took the litigation and represents approximately 460 clubs, said that he hopes the majority of refund claims will be repaid in the next few weeks.

The case goes back to a Court of Justice of the European Union (CJEU) ruling in 2013 that green fees at private members’ golf clubs should have been exempt from VAT and a subsequent case in 2015 at the First Tier Tribunal principally covering the level of unjust enrichment. In both cases the clubs were represented in court by Amanda Brown of KPMG.

Stewart said: “Every original and topped up claim which was rejected by HMRC had to be appealed to the tribunal.

“Following the First Tier Tribunal decision in 2015 the claims then had to be adjusted in respect of items such as the green fee element of traditional corporate golf days, green fees charged to tour operators and green fees paid on corporate / business credit cards. The methodology for making adjustments to the KPMG claims going back to 1990 was agreed with HMRC earlier this year. This has been a time consuming task but the majority of KPMG adjusted claims have now been sent to HMRC.

“Repayments to the clubs are coming through on a daily basis and so far approximately 25 per cent have been received.

“There has typically been a six to eight week period between HMRC receiving the adjusted claim and the payments being processed. Given the work we have done with HMRC to agree the methodology we have used, I am hopeful that the majority of clubs that we have submitted claims for will have received their refund by the end of this year.”

KPMG VAT director Paul Stewart

Paul Stewart

He added that for clubs not represented by KPMG, provided the appeal process was followed and HMRC is satisfied that the claim methodology produces a fair and reasonable result, then they should expect to receive refunds in due course.

KPMG has also been asked by a number of clubs to challenge that part of the decision relating to green fees charged to tour operators. The case is expected to be heard in 2017. In addition, KPMG is filing protective claims for a number of clubs via the High Court in respect of compound interest.

The successful private members’ clubs are collectively receiving millions of pounds.

Last month it was revealed that Blairgowrie Golf Club is Scotland was one of the first to receive its repayment – £550,000.

Blairgowrie’s managing secretary, Douglas Cleeton, said the money would be of tremendous benefit to the golf club.

“It’s a wonderful and significant windfall for us and we will be considering carefully how it will be invested,” he said.

“We won’t be the biggest beneficiaries in Scotland, not by a long way.

“At the top end of the market, there are clubs with exceptionally big visitor numbers which will be getting more than £1 million.

“The vast majority, of course, will be getting a windfall which is much more modest.

“For many clubs struggling to survive in the current climate the VAT windfall will be a lifesaver, especially at this time of year.

“It may take the immediate pressure off and dig some clubs out of a hole for a year or two.

“But no one can afford to think a rebate will be a quick fix solution to all their problems, especially with VAT recoverable on capital projects and essential machinery now down to 14 per cent as opposed to 100 per cent only 25 or 30 years ago.

“The tax man will get his money back over the long term.


“Across Scotland we are seeing golf club membership on the slide, visitors looking for the best possible deals and bar revenue falling. So you have to be on top of your game to keep things ticking over.

“Fortunately at Blairgowrie we haven’t been relying on private members’ clubs winning the long-running legal test case against HMRC.

“But now that we have the money in the bank the committee will be thinking carefully how to make the most of our welcome windfall.

“Several projects are under consideration for the long term benefit of the golf club and to provide a legacy for the future.”


Alistair Dunsmuir
By Alistair Dunsmuir November 3, 2016 15:58
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