Following the CJEU’s decision in Bridport & West Dorset Golf Club3 in December 2013, HMRC has released Business Brief 25/2014, in which its changed policy in relation to supplies made to non-member users of sports clubs is set out.
Under EU law, supplies by non-profit making bodies of services closely linked and essential to persons taking part in sport are exempt from VAT. However, Group 10 of Schedule 9 to the Value Added Tax Act 1994 (VATA) requires that fees paid by non-members to not-for-profit sports clubs attract VAT. The reasoning being that such fees are “additional income” on which VAT is chargeable.
The CJEU decided that this treatment was contrary to EU law. Where a supply is made by a non-profit making body, it is irrelevant whether that supply is provided to a member or visitor.
HMRC now accepts that supplies of sporting services to members and non-members of non-profit making sports clubs qualify to be treated as exempt from VAT. Legislation amending Group 10 of Schedule 9 was made on 1 December 2014 and came into force on 1 January 2015. Taxable persons who have previously accounted for VAT on the basis of the old legislation may be able to seek to recover overpaid VAT.
If you believe you may have a claim, please contact us to discuss how we may be able to assist you.
To read Business Brief 25/2014 click here.