Non-profit organisations may be entitled to seven-figure tax rebates
Around half of all British golf clubs could be set for cash windfalls following a landmark VAT ruling delivered down by the European Union.
The outcome of a case brought forward by Bridport& West Dorset Golf Club, the ruling means that non-profit clubs can claim back four years’ worth - and, in some instances, more - of VAT paid by non-members on green fees.
Of the 3,000 plus clubs in the UK, an estimated 1,500 are classed as ‘non-profit’. These not-for-profit clubs are also exempt from VAT on membership fees, unlike proprietary or for-profit clubs.
As such, they could be entitled to a rebate after paying VAT ‘unlawfully’ - and, it is being predicted that, in certain cases, this could result in six or seven-figure windfalls for some of the clubs.
The claim successfully lodged by Bridport& West Dorset, for example, is thought to be worth in the region of £140,000.
“This is an industry changing decision which could see golf clubs claiming hundreds of thousands of pounds back from HMRC,” noted Gemma Gower, the VAT manager at top accountancy firm, Mitchell Charlesworth.
“Golf clubs should not delay starting the process of claiming back what is rightfully theirs, as the longer they delay, the more VAT they stand to lose.
“Getting a claim moving now could bring real financial benefits, particularly to small clubs and those which are struggling with a downturn in usage or membership.”
In the region of 500 clubs have already lodged claims with HMRC and these could be backdated as far as 1990, following EU Legislation.
Ms Gower added: “The impact of the EU ruling is two-fold on not-for-profit members’ golf clubs. Firstly, they may be able to recover overpaid VAT and, secondly, they should also review their pricing structure going forward. Receiving expert advice is the vital first step in this process.”