Non-profit making sports clubs could be unfairly hit by a crackdown on VAT avoidance which could cost them huge amounts in extra taxes, experts warned this week.
New rules, due to be presented to parliament next month, could deprive such sports clubs of their right to receive members’ fees free of VAT.
The rules are designed to stop VAT avoidance by commercial ventures masquerading as non-profit making clubs.
John Kennedy, an Ernst & Young VAT partner, said they could affect non-profit making clubs and cost them millions. He said golf clubs run by their members for their own enjoyment, rather than as a commercial venture, could be hit hardest.
With the popularity of golf being fuelled by stars such as Colin Montgomerie (above), Allan Fullen, the English Golf Union’s accountant, said there had been extensive negotiations with Customs over the rules which assured him that genuine, non-profit making golf clubs had nothing to fear.
But the Chartered Institute of Taxation said: ‘We find it intolerable the whole voluntary sector should be faced with legislation which is well-nigh incomprehensible when its true target is an insignificant number of clubs flying under false colours.’
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