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Golf Clubs to be Reimbursed for Overpaid VAT

Written by: Keith Tully

Published: 6th February 2015


Private members golf clubs around the UK are to be reimbursed for overpaid Value Added Taxes (VAT) that HM Revenue & Customs (HMRC) now concedes were partially paid in error.

The refunds are to be paid over the course of the next few months with HMRC having agreed in part with the arguments made by representatives of the Bridport and West Dorset Golf Club in advance of a precedent-setting legal case being heard at the Royal Courts of Justice in London.

Amounts to be paid back to golf clubs nationwide relate to VAT on the non-member green fees of not-for-profit golf clubs. HMRC describes the refunds as being interim payments and has made clear its intention to work towards firming up its arguments on the issue so it might avoid having to repay the remaining amounts of VAT

Clubs due to get VAT refunds can expect to receive the relevant amounts before April 2015. 

Explaining some of the details of the case, which has become a source of considerable controversy among golf club mangers across the country, the Golf Club Managers Association said:

“HMRC will apply a provisional unjust enrichment restriction to the claims and make an interim payment plus simple interest.

“For the majority of clubs, this restriction will be 50 per cent of the value of the final claim. For a small number of clubs there will be a restriction of 67 per cent of the final claim. Whether a club will receive 50 per cent or 67 per cent depends on a number of factors but the higher restriction is likely to be associated with the highest green fees and thereby highest claim value.”

The essential assertion underlying the ongoing court battle is that the private members golf clubs have been paying VAT at an incorrect rate for a number of years. The issue was opened up to considerably greater scrutiny in the UK in 2013 after a favourable ruling for golf clubs was handed down by the Court of Justice of the European Union.

The latest partial victory on the matter that will see private members golf clubs paid back VAT amounts in the coming months is being seen as unprecedented with HMRC never before having been forced to pay back taxes taken under any similar circumstances. Tuesday a bit busy, Wednesday at the match, so otherwise will be Thurs or Sunday.

Keith Tully

Keith Tully

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Keith has been involved in Business Rescue since 1992, during which time he’s worked for both independent and national firms. His specialties include company restructuring matters and negotiating with HMRC on his clients behalf.

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