VAT Information


13th May 2016

KPMG have provided the following update regarding VAT on Visitor Green Fees:

Following the First Tier Tribunal (“FTT”) decision in The Berkshire Golf Club and Others in December 2015, HMRC have, as expected, now published a Revenue and Customs Brief 10 (2016) and also updated the VAT Information Sheet originally issued in February 2015. The Revenue and Customs Brief deals with the relevant aspects of the decision whereas the Information Sheet sets out HMRC’s approach to the processing of claims. Copies of both documents are attached. 

Our updates of 2nd February 2016 and 11th March 2016 covered the relevant aspects of the decision. With regard to unjust enrichment HMRC confirm that following the decision they accept that clubs are entitled to a 90% refund of VAT overpaid on green fees. HMRC go on to confirm that in accordance with other aspects of the FTT decision the green fee element of corporate days (regardless of how constituted) will be taxable as well as supplies of green fees to tours operators. HMRC’s comments are as expected although no specific reference is made to visitor green fees paid on a corporate card. We understand HMRC’s policy is that these remain standard rated and claims will need to be adjusted accordingly.

You will be aware from previous updates that KPMG have been retained on behalf of a number of clubs to appeal that part of the FTT decision relating to green fees charged to tour operators. Permission to appeal has recently been granted by the FTT.

Adjusting Claims
We have recently submitted several samples of adjusted claims to HMRC with the aim of agreeing the methodology so that all claims can be adjusted on a consistent basis. We are in dialogue with HMRC and hope to reach an agreement in the coming days. In the meantime, we request that those that have not responded to the survey, endeavour to respond as soon as possible. Adjusted claims will be submitted in the order in which survey responses have been received and clubs will receive confirmation once the final claim has been submitted. Please do not contact us for updates, as responding to such queries results in delays to adjusted claims being prepared.

24th March 2016

KPMG have provided the following update regarding VAT on Visitor Green Fees:

The Supply of Green Fees through Tour Operators
When the Tribunal released its decision on the unjust enrichment issue, it also dealt with the VAT liability of green fees sold through tour operators.

We have been approached by several Clubs who wish to fund an appeal against the decision on the VAT treatment of green fees sold through tour operators. We consider the prospects of success against that part of the decision are good and we are in the process of preparing their appeal.

This is only likely to be of interest if you have a significant amount of tour operator green fee income included in your historic claim. If you do, then you should consider whether or not you want to lodge a further appeal. In the event of a successful outcome Clubs would not be entitled to further retrospective repayments relating to tour operator green fees (except for the statutory 4 year period) unless a further appeal has been lodged with the Tribunal. For example, if a decision in favour of the Clubs is released in June 2017, Clubs who have not filed a separate appeal will only be able to reclaim overpaid VAT going back 4 years. Therefore the periods 1990-1996 and 2009 to June 2013 would be time barred.

We can assist you with any appeal, although we will need to charge a fee for doing so. The fee is for lodging your appeal and applying to have it stayed pending the outcome of a lead appeal and would be £1,500 plus VAT.

We do not expect that this will impact on many Clubs apart from the ones referred to above. However, we wanted to provide Clubs with an opportunity to protect their position.

Unfortunately the deadline is very close, as we have only very recently confirmed that we will in fact be instructed to run a lead case. The deadline for asking the Tribunal for permission will be Thursday 24th March 2016 (i.e. this Thursday).

VAT on Visitor Green Fees: Compound Interest
In our update of 2nd February 2016, we requested those Clubs who wished to lodge a claim via the High Court in respect of compound interest will need to notify us of their intention to do so by 31 March 2016. We have extended this period until 14th April 2016. A significant number of Clubs have confirmed their intention to proceed. If you would like to make a claim for compound interest, please email

The compound interest process will not delay the repayment of VAT claims and simple interest on agreed claims.


8th February 2016

VAT on Visitor Green Fees: Update
HMRC have now formally confirmed that they will not be appealing any further aspect of the decision in The Bridport and West Dorset VAT case.  As previously advised, this means that the level of Unjust Enrichment relating to green fee claims will be 10%.

Claims will need to be adjusted to take into account:
• The green fee element of Traditional Corporate Golf Days;
• Green Fees charged to Tour Operators;
• Green Fees paid by Corporate Credit Cards.

Last week, KPMG issued a survey to a sample of golf clubs and will assess the data in the week commencing 8th February, ahead of arranging a further meeting with HMRC to discuss the adjustment process. The aim is then to submit individual adjusted claims for each club with a view to securing a repayment of the VAT and simple interest as soon as possible.  

7th December 2015
KPMG have provided the following update: 

VAT on Visitor Green Fees: First Tier Tribunal Decision
Following the VAT Tribunal hearings in June and July 2015, the decision of the First Tier Tribunal has now been published. As KPMG have previously communicated, the hearings related to the quantum of unjust enrichment arising from the VAT repayments and also several technical VAT matters.

Unjust Enrichment
KPMG are pleased to confirm that the Tribunal has ruled that private members golf clubs had borne 90% of the cost of the VAT charge and therefore the amount that green fee claims should be restricted by is only 10% of the VAT overdeclared. During the hearing, HMRC argued that the restriction should be 50%/67% (as published in Business Brief 19/2015) whereas KPMG argued that the amount claims should be restricted by is 5% of the VAT overpaid. The Tribunal decided that there was no basis on which to distinguish between different clubs, and that all clubs had borne 90% of the cost of the VAT charge.
KMG believe this is an excellent outcome and are pleased that the Tribunal have validated many of the arguments advanced by KPMG’s economist and legal team.

VAT Technical Matters
There were certain VAT technical matters also considered by the Tribunal relating to aspects of HMRC’s guidance contained in Information Sheet 01/15.

Course Maintenance VAT
The Tribunal agreed with KPMG’s arguments that if a club does not have corporate green fee income but does have buggy hire or tee advertising income, both of which are standard rated, this was sufficient for VAT on course maintenance costs to continue to be treated as ‘residual’ and eligible for partial recovery calculated by reference to a partial exemption method.

Corporate and Tour Operator Green Fees
KPMG argued that where a green fee relating to individuals playing golf was paid for on a corporate credit card this should still be treated as VAT exempt.  KPMG had previously accepted that the green fee element of traditional corporate day packages should be treated as standard rated. Unfortunately, the Tribunal agreed with HMRC on this point and decided that in the event that green fees are paid by a corporate rather than an individual these are subject to VAT at the standard rate.
In addition, the Tribunal ruled that green fees charged directly to Tour Operators are subject to VAT at the standard rate. This only includes supplies where the tour operator is billed directly, i.e. buys in the green fee and supplies it on as principal and does not include green fees charged to individuals via a ‘true’ agent (for example tee times websites).
Overall, KPMG believe the decision issued by the Tribunal is extremely positive for private members clubs.

Next Steps
HMRC have a relatively short time to decide whether or not to appeal the decision, and must ask the First-tier Tribunal for permission to appeal within 56 days of the release of the judgment. If the First-tier Tribunal refuses then HMRC may ask the Upper Tribunal for permission within 1 month of that refusal. The KPMG current view is that they will not be appealing against the findings of the Tribunal.
On the basis of the Tribunal decision KPMG have made immediate contact with HMRC to agree a process for adjusting the claims to take into account the unjust enrichment restriction and where appropriate, corporate and tour operator green fees and course maintenance VAT. KPMG will shortly be issuing a questionnaire to collect the additional information required to progress your claim. KPMG would appreciate if you could refrain from asking questions in relation to this update as this will result in a delay in agreeing the process with HMRC and thereby a delay to progressing the claims.

KPMG will issue an update when they have further information and issue the questionnaire as soon as possible.

5th November 2015

Update: Revenue & Customs Brief 19 (2015)

As previously advised, we are still awaiting the decision following the First Tier Tribunal hearing which took place at the Royal Courts of Justice in the week commencing 22 June 2015 (unjust enrichment) and continued for a further 2 days on 6 and 7 July 2015 (various VAT technical matters).

On 2 November 2015 HM Revenue & Customs released Brief 19 (2015) stating that “although the question of unjust enrichment is still before the courts, HMRC has decided to pay or credit, subject to conditions, 50% or 33% (depending on the golf club) of the value of valid claims ahead of any court decision.”  [emphasis added by KPMG]
Before issuing this update we wanted to speak to HMRC. They have confirmed that the reason for the timing of the publication of the Revenue & Customs Brief is that HMRC have finally made a decision on how clubs should be allocated to the 50% and 67% unjust enrichment categories.  This is based on whether green fees are less than, or more than, £100 per person per round.
One of the key conditions for payment to be made is that claims are adjusted in line with VAT Information Sheet 01/15.  You will recall that in addition to the issue of unjust enrichment, there were three other technical VAT matters heard at the First Tier Tribunal during the second hearing which were:

• VAT treatment of corporate day green fees;
• VAT treatment of green fees charged to tour operators; and
• The treatment of VAT incurred on course maintenance.

HMRC’s position is that even where a corporate body simply pays for the green fees only, then the income is to be treated as a corporate day. This is on the basis that the supply is used by the corporate body for the purposes of its own business rather than a supply to persons taking part in sport. A number of clubs have informed us that, in addition to the supply of corporate day packages, they believe that from time to time they will have had some green fees paid by a corporate body (e.g. on a corporate credit card) but the work involved in calculating this for the last six years would be extremely time consuming and in many cases could not be done exactly.
KPMG argued at the First Tier Tribunal that VAT should only be accounted for on corporate day packages. If a club has no corporate golf days under HMRC’s definition, analysis of all costs would need to be undertaken to comply with the Information Sheet. Again, this has been challenged at the First Tier Tribunal and this will not be necessary if we are successful at the First Tier Tribunal.

Our view therefore is that at the present time the vast majority of clubs (if not all) will not be able to file a compliant claim per the Information Sheet without considerable time investment which, if the First Tier Tribunal finds in the clubs favour, will have been unnecessary. We anticipate a judgment, at least on these issues, before Christmas and on that basis recommend that we await that judgment before seeking to adjust the claims. We will, however, need to adjust claims in relation to the green fee element of corporate day packages and will be requesting information separately in relation to this in the near future.
If necessary, we will send a further request following the judgment to capture any  further information that may be necessary for adjusting claims subsequent to the First Tier Tribunal decision.
A further update will follow when the decision of the First Tier Tribunal is released.

22nd June 2015
KPMG have provided the following update to their clients that we can share with you:

Update: Post Bridport Appeals

KPMG has been continuing to press HMRC with the objective of resolving various matters including the definition of corporate days, VAT recovery on course maintenance expenditure and the allocation of clubs to the different categories in terms of unjust enrichment in order to secure an interim payment. HMRC finally responded to KPMG on 3June 2015 and further details are set out below.

A number of clubs, and indeed other advisors, have been asking us for updates. It is only now that having finally received written confirmation from HMRC that we are in a position to update further.

In addition, we have been (and continue to be) heavily involved in the considerable preparatory work for the unjust enrichment hearing which takes place in the week commencing 22 June 2015.

Relevant issues

1. Criteria for allocating clubs into the 50% and 33% categories in terms of unjust enrichment

HMRC have still been unable to communicate a decision on how this is to be done, even though it is now six months since they received the report on unjust enrichment from their expert. HMRC had previously intimated that clubs with a Bridport agreed claim in excess of £750k and a green fee charge of £100 upwards would fall into the 33% category (therefore at this stage the interim payment would be 33% of the claim amount) with the remainder falling into the 50% category. Last week HMRC informed us that they will not make any interim payments until the promised Revenue & Customs Brief on Unjust Enrichment and allocation of the clubs to the 50% and 33% categories is issued. We are challenging HMRC on this position.

2. Definition of “corporate days” (see paragraph 3.1 of Information Sheet 01/15)

Some time ago we suggested the following definition of a corporate day to HMRC:

“… where a club supplies a package to a corporate who wishes to hold an event which includes green fees, catering, the right to place advertising material in the clubhouse/course, exclusive use of the club by way of block tee times and issues a formal tax invoice to the corporate then this would be classed as a corporate golf day and therefore the green fees would also be a taxable supply. Where a corporate body simply pays standard green fees and the players use the course in exactly the same way as any other visitor then the true beneficiary is the individual playing golf and therefore remains an exempt supply.”

HMRC have finally stated that they do not agree with this interpretation. It is HMRC’s view that any charge for a green fee to a corporate is subject to VAT whether the corporate acquires exclusive use of the course with a package of other services, or simply four green fees for two executives to play golf with two clients. In our view, this is not a supportable position. HMRC’s interpretation will be contested at the Tribunal hearing.

3. Treatment of input tax incurred on course maintenance costs

HMRC’s current position on the treatment of course maintenance costs is that they can only be treated as residual (i.e. non-attributable) if:

You have corporate golf days; or
You supply green fees to tour operators; or
There are categories of course maintenance costs usedin maintaining the curtilage of the clubhouse, including non-course paths, verges and car parks. Please note that if a clubhouse has no curtilage of its own or the course abuts the clubhouse then HMRC’s position is that VAT on course maintenance costs is only residual to the extent such costs are also used to maintain non-course paths and verges and the car park.
For the time being, you should only treat course maintenance costs as residual where you meet any of the above criteria (using HMRC’s definition of corporate days – see below).

At the hearing, we will be arguing in favour of our definition of corporate days, and also that tee advertising income or buggy hire income should make course maintenance costs residual in any case.

After the judgment comes out, we will release further guidance on what the Tribunal says about the circumstances in which you can treat course maintenance costs as residual, as well as the types of costs you can include.

Corporate golf days

In the meantime, we advise you to account for VAT on the green fee element of corporate days following the issue of HMRC’s Information Sheet 01/15. We cannot be certain of a final definition of a corporate day but clubs are advised to try and follow the definition in HMRC’s Information Sheet 01/15, which can be found here, until the matter is resolved at Tribunal.

We are still in dialogue with HMRC with regard to corporate day green fee income from mid-2014 until the issue of HMRC’s Information Sheet 01/15 and will update you further in due course.

Amendments to claims and interim payments

As stated earlier, we have been pressing HMRC to confirm their precise position in relation to various technical matters in order to process adjustments to claims and to facilitate interim payments to clubs. The reply recently received from HMRC fell short of providing us with the information required to determine the question of the timing and quantum of interim payments. Last week we wrote to HMRC setting out an expectation as to how the quantum of the interim payments should be determined.

In order to progress matters, we are sending a sample of three adjusted claims to HMRC and demanding review, processing and partial payment without any further undue delay. This relates to clubs who took part in the unjust enrichment exercise. Once these are processed, we will ask you to provide us with certain additional information in a questionnaire that will be accessible online in order to make any necessary adjustments to your claim. We will email you a link to the questionnaire once this is available. Once we have this information we will submit an adjusted claim and inform HMRC of the amount of the interim payment we expect the relevant club to be paid.

There is a significant amount of work to be undertaken in adjusting claims. As such, we will be unable to respond to queries in relation to the progress of the claim. Please be assured that when we have further information we will issue an update.

Our focus is on reaching agreement with HMRC as soon as possible regarding any necessary adjustments to the amount of the claims whilst separately challenging HMRC on their failure to make a decision on the allocation of clubs to the 50% and 33% categories. You will appreciate that we are unable to give any indications of the timing of interim payments but we will confirm with you when your claim has been agreed with HMRC. You can be assured that we are doing all we can with regard to this matter.

We understand any frustration as a result of HMRC’s continued delay in issuing a Revenue & Customs Brief to explain the process leading to the making of interim payments.

Additional Interest

We have previously given you updates on the Littlewoods case, which argues that HMRC should pay additional interest. Recently the Court of Appeal found that additional interest should be paid.

We will be in touch separately to explain what you need to do if you want to protect your right to claim additional interest.

Nairn Golf Club Case

We are aware that there has been an article published in relation to the Nairn Golf Club Tribunal decision. This decision was in relation to whether an appeal had been submitted in time rather than in relation to the processing of the claims.

KPMG submitted appeals to the Tribunal for claims that were processed and submitted by us and as such, the Nairn decision will not affect clubs who submitted their claim 

2nd February 2015
KPMG have provided the following information:

Case Management Hearing Update
The second case management hearing took place at the Royal Courts of Justice in London on 22 January 2015. KPMG has been liaising with HMRC both prior to and subsequent to the hearing to agree and finalise the directions which were sent to the Tribunal on 23 January. The Tribunal formalised these directions on 29 January 2015.

As outlined in our previous update, KPMG consider that the economic burden of the VAT charge is borne exclusively, if not all but exclusively, by the clubs. HMRC however have confirmed that they wish to invoke a defence of partial unjust enrichment and the Tribunal has agreed for the matter to be listed for a hearing. We expect this will take place in June/July 2015 and will provide an update once this date is known.

KPMG has agreed with HMRC that KPMG’s economists will liaise directly with HMRC’s economists in the course of the coming weeks to confirm points of agreement and points still in dispute with regard to unjust enrichment.

Information Sheet

HMRC will issue an Information Sheet by 9 February. This will provide guidance on the issues that need to be addressed before HMRC will agree the value of claims.

Interim payments

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% of the value of the final claim. For a small number of clubs there will be a restriction of 67% of the final claim. Whether a club will receive 50% or 67% 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. HMRC will have 30 days to make the interim payment once the final claim amount is agreed.

19th September 2014
KMPG have provided the following information:

Bridport Follower Appeals - Unjust Enrichment
The ongoing delays to the repayment of claims submitted in relation to VAT overpaid on visitor green fees will be of concern to private members clubs. Following the issue of the Business Brief, HMRC indicated that where a club undertakes to identify the visitors who paid the green fees and repay the overpaid VAT to them repayment would be authorised. In respect of all other instances, HMRC have taken a provisional view that they may be able to invoke a defence of unjust enrichment.

KPMG have considered the position on behalf of their clients and believe that such a defence is likely to be unsuccessful. It requires, in the first instance, HMRC to establish that the VAT in question was “passed on” to the golfer. Previous case law has demonstrated that this is difficult to establish where prices are set by reference to the market (rather than a cost plus formula). We understand that this is the situation for green fees.

HMRC applied to the Tribunal for a further 6 month extension to consider their position in relation to unjust enrichment. The Tribunal rejected this application and has set a date for a case management hearing: Thursday 25 September 2014 at 10am. Although the Tribunal has invited all relevant claimants, attendance is not compulsory.

KPMG will be making submissions on behalf of the clubs they represent, and understand that at least two other accountancy firms and two barristers will also attend on behalf of their clients. KPMG has spoken with each of them and understand that they are all supporting their position. The Tribunal will therefore see unified opposition to HMRC’s arguments.

You may previously have seen updates which suggested that you should lodge an application with the Tribunal supporting KPMG’s position. Given that the Tribunal has now listed a hearing to decide how to progress the issue, KPMG no longer think that this is necessary.

KPMG have identified a club prepared to act as a lead case and are prepared to take conduct for the benefit of the golf clubs that they represent. KPMG believe that this matter will be most swiftly and cost effectively resolved through the proffering of a new test case and ensuring a tight timetable for HMRC to issue their statement of case. KPMG do not think there is any merit in trying to prevent HMRC from arguing their case unless they fail to meet future deadlines set by the Tribunal or fail to set out a coherent case when directed to do so. They will argue that any case should determine the result for all of their clients and have said that although this would then in theory apply to all relevant clubs, others would be able to opt out if they so wished.

The Tribunal will decide how many lead cases are required once it has heard our arguments and those of HMRC. KPMG think the Tribunal will accept that only one club is required, however if more than one club is required, the Tribunal will outline the different categories of club it wants to see represented. Once those criteria are set, KPMG will approach additional clubs to act as lead parties, if necessary. The Tribunal will almost certainly not select clubs at the hearing on 25th unless it is the club we are proposing as a single lead case.

Clubs for which KPMG have filed claims need take no further action. Clubs represented by other advisers may choose to attend, but do not need to. If they choose not to attend, then Tribunal will make its decision based on the submissions by KPMG, other advisers and HMRC.


31st July 2014
KMPG have provided the following information:

VAT on green fee appeals
HMRC’s request for a stay of appeal until 18 July 2014 while they considered unjust enrichment has now expired. We understand from HMRC that they are making an application to the Tribunal for a further 6 month extension on the grounds they are still considering whether to raise the defence of unjust enrichment.

KPMG is of the view that this application is completely unreasonable since;
i. HMRC have already had over seven months to consider the Bridport ruling and to decide whether they wish to invoke a defence of unjust enrichment; and
ii. There was ample opportunity to raise the issue of unjust enrichment during the litigation.

KPMG has therefore made its own application to the Tribunal for a directions hearing for the purpose of determining how the matters are to proceed and agree a timetable for the resolution of the issues in dispute. We expect the directions hearing to take place within the next month or so. KPMG will therefore be opposing the application from HMRC and are liaising with one particular golf club with a view to it acting as lead litigant in relation to unjust enrichment should that ultimately become necessary.

27th June 2014
KMPG have provided the following information:

HMRC have released the attached Business Brief in respect of the Bridport case.

Claims submitted to HMRC
HMRC have now formally accepted that supplies of sporting services made to non-members by not-for-profit sports clubs are, and should have been treated as, exempt from VAT. For not-for-profit golf clubs this, of course, relates specifically to visitor green fees.

The Business Brief notes that where an appeal in respect of claims covering periods prior to the past four years has not been lodged with the Tribunal, HMRC will not consider the claim. Appeals have been lodged with the Tribunal in respect of all claims submitted by KPMG which cover the periods 1990-1996 and 2006 onwards.

HMRC Claim Processing
There will be two phases in which claims are processed. Phase 1 will relate to clubs which intend to refund the VAT to visitors. Under Phase 2, HMRC will consider the claims lodged by all other clubs. It is our understanding that very few, if any, golf clubs will adopt the reimbursement arrangements under Phase 1.

For all the clubs that fall under Phase 2, HMRC are still considering whether to invoke a defence of unjust enrichment. HMRC will issue further advice once they have concluded on this matter.

We previously advised that we expected to have further information on HMRC’s position on unjust enrichment in early June. Whilst we have remained in dialogue with HMRC, we still do not have anything further to report on this.

Corporation Tax
HMRC have made general reference to Corporation Tax. Please click here for the relevant detailed HMRC Guidance on computation of profits by member’s clubs.

Set Off
HMRC have the right to set off any under payments or over claims of VAT from earlier periods against the claim in addition to any outstanding VAT debts and assessments.

HMRC will also offset any other outstanding tax liabilities against the claim.

6th May 2014
HMRC have now asked the Tax Tribunal to put all claims on hold until July so that they can decide whether to argue unjust enrichment. We are discussing this with HMRC and voicing our concern at the length of delay and will keep you informed. We will contact you again shortly to ask for additional information in order to bring your claim up to date.

Unjust enrichment
HMRC would need to show that your pricing structure passed the economic burden of the VAT on to customers. In our experience fees are set by reference to the local market, and VAT has been paid out of that amount. We understand that clubs continue to charge the same price, but based on the decision in Bridport can now retain the full amount instead of paying a proportion to HMRC. This supports our view that fees are generally set by reference to the market regardless of the VAT liability, making the unjust enrichment argument difficult for HMRC to pursue.

Ongoing charges
Given HMRC’s delay in the publication of the Business Brief, we recommend that you rely on the Bridport decision being applicable to your golf club and treat any green fees received as exempt with effect from the start of the current VAT return period. This is on the basis that the decision in Bridport has confirmed that the relevant part of the UK VAT legislation is defective. You should remove any references to VAT from any documents or information relating to green fees. We are informing HMRC that we have given this advice.

Interest on your claims
Interest will be payable on top of your claim. There is ongoing litigation about whether that interest should be compounded. Simple interest will be paid as a matter of course, however you will need to consider taking additional action to protect your potential compound interest claim. We will shortly send you an update setting out the options and an analysis of the potential benefit

17th January 2014
The European Court of Justice released its judgement on 19th December which was in favour of the golf club. The ECJ found that all supplies of the facility to play golf provided by non-profit making clubs must be exempt from VAT. Green fee income previously treated as taxable supplies are therefore now exempt and clubs will be entitled to make claims.

KPMG who led the action on behalf of the club initially started the claims process in early 2009 and many clubs submitted claims at that time. As at the time of writing HMRC have not issued any guidance on the ruling and KPMG are awaiting this in order that central resolution on the processing of claims can be achieved. The processing of the claims is complicated and will need to cover issues such as unjust enrichment, partial exemption recalculations and corporation tax and England Golf are liaising with KPMG and would not wish to issue advice before this information is available.

The decision in the Bridport case serves to highlight the ongoing taxation issues within the sport and England Golf are working with all sectors of the industry to try and achieve as fair a taxation structure as is possible.

19th December 2013
The European Court of Justice released its judgement in the Bridport & West Dorset Golf Club case in which the taxpayer challenged the UK’s treatment of green fees charged by not-for-profit members’ clubs.

The judgement went in Bridport’s favour and this is the final decision in the Bridport case.

The issue in dispute was whether or not green fees charged to visitors should be treated as exempt from VAT. HMRC argued that green fees should be taxed whereas on behalf of the golf club KPMG argued that they should be treated in the same way as annual subscriptions.

The ECJ found that all supplies of the facility to play golf provided by non-profit making clubs must be exempt. There can be no exclusion from exemption by reference to green fees being income not arising directly from memberships. It was also held it is not possible to apply a general exclusion which narrows the scope of the exemption as provided on the face of the legislation.

KPMG who have taken the case are looking to a central resolution on the processing of the claims. It is expected that HMRC will in due course issue a press release in connection with the case and we recommend that you await further guidance before contacting HMRC.

England Golf and the Proprietary sector are considering this decision and the earlier Chipping Sodbury VAT decision. This is with a view to approaching HMRC to look at the most attractive options available having regard to the discretion afforded by European VAT legislation to treat proprietary and not for profit members clubs in such a way that helps maximise participation in golf across both sectors.

11th October 2013
A statement has been released by KPMG relating to the latest activity regarding this case.  The statement reads as follows:

"On Tuesday 2nd October the Court of Justice of the European Union heard oral submissions in the case of Bridport & West Dorset Golf Club, the representative case on the VAT liability of green fees charged to non-members by not-for-profit member golf clubs.

The hearing was quite short, lasting just over an hour. Submissions were made by the UK, by the European Commission and by KPMG behalf of Bridport. The Court asked a number of questions, focussing on ensuring they understood the arguments put forward by the UK, and asking the European Commission to focus on a number of procedural issues and questions of statutory interpretation.

The UK’s argument remains that exemption should be limited to activities taking place amongst the members of a club.

The European Commission’s view was that although the UK’s position looked correct initially, once one considered the exemption more closely it was difficult to support.

The Court did not express a view, and reserved judgment until after it had considered the parties’ submissions in more detail.

Although we do not have a timetable for the release of the Court’s decision, in the ordinary course of events, we would expect a decision before the end of the year." 

28th July 2011
Following the recent announcement of the result of The Bridport & West Dorset Golf Club VAT case, KPMG have issued a statement regarding HRMC's request for permission to appeal that is reproduced in full below.

HMRC’s Appeal
Following the decision of the 1st Tier Tribunal on 1st June this year, HMRC have asked the 1st Tier Tribunal for permission to appeal the decision. HMRC are challenging the legal basis for the Tribunal’s decision and want the case referred to the European Court of Justice.

HMRC’s Business Brief
HMRC have released guidance on the impact of the decision. Until the matter is finally decided, clubs should continue to charge and account for VAT on green fees and indicate that they may impose penalties on anyone who does not. HMRC’s guidance can be found on their website.

KPMG view
KPMG remain confident that the Tribunal reached the correct conclusion and are firmly of the view that a reference to the ECJ is unnecessary. The ECJ has previously indicated that the issues HMRC raises are for the national courts to determine. In KPMG's view the national court has determined them and has reached the correct conclusion.

KPMG will ask the tribunal not to give HMRC permission to appeal; however given the nature of the case and the number of taxpayers affected KPMG think HMRC have a greater than 50% chance of obtaining permission.

Next Steps
KPMG will lodge a short document with the Tribunal objecting to HMRC’s request. The Tribunal will consider the matter on paper in the next 4 weeks and decide whether or not to grant HMRC permission to proceed to the Upper Tribunal.

In the event that HMRC are granted permission, the Upper Tribunal will arrange a hearing to consider the parties’ views on a reference to the ECJ and to hear HMRC’s appeal. Amanda Brown, head of KPMG’s tax litigation team, represented Bridport in the 1st Tier hearing, and will represent Bridport at the Upper Tribunal.

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