Hundreds of member-owned golf clubs in the UK could be in line for a substantial windfall after the European Court of Justice ruled they should not have been forced to levy value added tax (VAT) on visitor green fees.
Bridport and West Dorset Golf Club, along with tax advisers KPMG, brought a case several years ago against HM Revenue and Customs, arguing that, as not-for-profit organisations, members’ clubs should not be liable for 20 per cent VAT on visitor green fees. Member subscriptions at such clubs are already exempt from the tax, but proprietary owned, for profit clubs are required to levy VAT on both subscriptions and green fees. The case was heard by the European Union’s highest court in October, and judges have today issued a decision, supporting Bridport and KPMG.
The sums involved could be substantial. Bridport, a relatively small club in a rural area, charges a green fee between £32 and £38 a round, and stated in the case documentation that it was seeking a refund of over £140,000 in incorrectly paid VAT. Reportedly, between 300-400 other clubs have also submitted claims as part of the same case.
Gary Harley, head of indirect tax at KPMG in the UK said: “A large number of non profit making golf clubs throughout the UK had lodged claims with HMRC for overpaid VAT on visitor green fees for periods in excess of nine years. I hope that the eventual repayments arising from today’s decision will enable additional investment to be made in their infrastructure facilities to encourage participation in golf.”
But owners of proprietary golf clubs are less than happy at the decision. One source told GCA: “This is very bad news for proprietary clubs. We are already disadvantaged to the tune of 20 per cent on membership fees, and now we will face the same problem in respect of green fees.”