HMRC COULD PAY an estimated £115m in VAT to golf clubs after the European Court of Justice ruled against it in an ongoing dispute with West Dorset Golf Club.
The EU ruling has declared that VAT exemptions should include charges made to visiting players, meaning possible big pay-outs for golf clubs across the country.
Since the 1990s, the charge for playing sport at not-for-profit clubs has been exempt from VAT, but HMRC restricted these exemptions to club members, for which it was eventually taken to court.
The taxman is now to study the accounts of golf clubs to ascertain whether they bore the costs of the VAT themselves, with pay-outs made on the basis that a clubs' green fees have been inclusive of VAT, which will be the case for most clubs.
With an upper-tier tribunal hearing likely to take place, the windfall is still to be confirmed. Should that ruling follow the first-tier tribunal's decision, VAT dating back four years can be reimbursed to affected clubs.
Andy Dawburn, VAT partner at Wilkins Kennedy, said: "This is a real breakthrough for golf clubs which can now begin claiming back what's rightfully theirs. Claimants will be able to back track their claim to March 31st 2009, which could mean a substantial cash injection for some clubs that may have struggled during the downturn."
The ruling does not apply to proprietary golf clubs, many of which have complained about the decision being unfair as it enables private clubs to possible offer cheaper membership, undercutting the prices offered by proprietary golf clubs who's members and non-members must pay VAT.
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