VAT and Sports Clubs
This note examines the VAT treatment of sports clubs - in the context of the change made in UK VAT law in 1994 to exempt from VAT certain sport supplies, and subsequent debate as to how these rules have affected golf clubs.
The VAT liability of sports clubs has proved a long and complex issue. In April 1994 the rules determining the VAT treatment of non-profit-making clubs were amended, following complaints by sports clubs and the European Commission that UK law was incompatible with European VAT legislation. Subsequently in March 1998 Budget, a draft Order was laid to amend these provisions, to prevent the practice of some commercial sports clubs seeking to enjoy the same VAT exemption granted to non-profit-making clubs. This was widely criticised for affecting the VAT position of a number of genuine non-profit-making clubs, and it was allowed to lapse. A revised draft was published in January 1999, with the intention that the Order would take effect from 1 April 1999. Following discussions with interested parties, HM Customs & Excise made further changes before the Order was laid on 20 July 1999. This legislation was debated on 26 October 1999 and finally came into force on 1 January 2000. Following these changes there has been a lot of debate as to how the new rules affect golf clubs - in particular, proprietary - or private profit-making clubs - who have argued that the VAT exemption which non-profit-making members-only clubs may claim is discriminatory.