Golf clubs set for another multi-million pound VAT rebate

Alistair Dunsmuir
By Alistair Dunsmuir May 18, 2017 11:59

Private members’ golf clubs could be in line for a VAT rebate worth hundreds of millions of pounds – in addition to the huge payouts hundreds received just a few months ago.

At the end of last year it’s thought that more than 450 golf clubs collectively received hundreds of millions of pounds from HMRC following 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.

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

A separate ruling due to be heard in the Supreme Court this summer could lead to a new round of refunds being applied to golf clubs, which has been valued at about £300 million.

Retailer Littlewoods has been locked in a long-running battle with HMRC, arguing that tax rebates owed to the company should include compound interest.

If Littlewoods is successful, experts say it could also result in bigger rebates for golf clubs. Because golfing VAT refunds stretch back over two decades, the precedent set would mean compound interest will increase repayments by up to 100 per cent.

The huge payouts has also led to increased calls by proprietary golf clubs to level the playing field regarding the VAT all golf clubs pay.

According to City A.M., HMRC has claimed a reduction in the VAT rate to five per cent, one of the proposed solutions by the UK Golf Course Owners Association (UKGCOA), which represents proprietary club owners, would cost the taxpayer £15 billion.

“However, in subsequent correspondence HMRC reduced its estimate of the hit to £1 billion, with no further explanation as to how either amount was calculated,” states the paper.

“UKGCOA refutes the estimates and has shared its own calculations. Made in conjunction with accountancy firm KPMG, it puts the annual cost to the exchequer at £520 million.”

Conservative MP for Lincoln Karl McCartney, who is the co-chairman of the all-party parliamentary golf group, urged the government “to move quickly on making decisions” on the VAT situation of both member-owned and proprietary golf clubs.

McCartney said: “It is vital that as a country we have a successful golf industry that provides jobs, contributes to economic growth and keeps the nation fit and healthy.

“Like any organisation, all golf clubs want is clarity and consistency in how VAT is applied. For not-for-profit clubs this is whether the VAT overpayments they receive should be based on compound or simple interest, while proprietary golf clubs just want a level VAT playing field.”

The UKGCOA said it “might” mount a legal challenge if it senses no movement in the Treasury position in the next six to 12 months.

Andrew Lloyd-Skinner, who leads VAT negotiations on behalf of UKGCOA, said: “While our strategy remains … to exhaust all collaborative methods to resolve the VAT distortion issue for golf, we have been disappointed with the lack of collaboration by HMRC analysts.

“Having said this, HM Treasury officials have been open to dialogue and recently agreed to take our proposed options to minister Jane Ellison. Our Treasury contacts are waiting for further information from us before doing so and we are in communication with our advisers at KPMG to provide this information.”


Alistair Dunsmuir
By Alistair Dunsmuir May 18, 2017 11:59
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  1. DJM May 18, 16:21

    Please don’t tell my club about this. The initial repayment barely rested in the bank account before being spent on such essentials as a clubhouse biomass boiler & solar panels

    Reply to this comment
    • Greeneking May 18, 18:59

      Planning for the future then and reducing expenditure in future years so that you can have stable or even reduced subs in future. They could I suppose have reduced fees for everyone now as some have done. Depends on your position I suppose.

      Reply to this comment
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