UK Golf Clubs Urged To Reclaim Ten Years' Worth Of VAT

by Robert Lee, Tax-News.com, London

19 January 2009

Non profit making golf clubs have until the end of March 2009 to claim for thousands of pounds on the net amount of value-added tax paid to HM Revenue and Customs on non-member's green fees, according to accounting firm KPMG.

As the result of a recent decision of the European Court of Justice, KPMG considers that there is now an opportunity for non profit making golf clubs to reclaim VAT from HMRC that has been accounted for on income received from non-members on green fees. The period of the potential reclaim is 10 years running from 1990 to 1996 and from 2005 to the current date. After March 31, claims will be limited to 3 years.

For complex technical and legal reasons, the intervening years do not qualify at present although it is still considered prudent by KPMG to submit protective claims for this period, as a number of separate arguments may be pursued. The firm also pointed out that the issue is not to be confused with a separate ground for claims regarding membership income.

KPMG believes that the existing UK law has been drafted too narrowly. It remains to be seen whether HMRC challenge the claims and if they do it is likely that litigation will be required.

KPMG estimates that, for every GBP10,000 per year of income that a golf club currently receives from non-members for green fees, a claim covering the whole period will be of the order of GBP20,000.

Paul Stewart, director in KPMG’s Indirect Tax Practice, said:

“We estimate that if the claims are successful a club with annual non members’ income of GBP100,000 would achieve a refund including interest of up to GBP200,000. Many clubs will be bracing themselves for a lean time because the occasional round of golf with a non-member or guest is the kind of discretionary spend that is easy to cut back on in the current economic climate. Golf clubs need to act quickly though as there is only a limited time period for claims.”

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