TaxPersonal TaxUnwary sports clubs face millennium VAT pitfall

Unwary sports clubs face millennium VAT pitfall

Local sports clubs around the UK could find they have suddenly become liable for VAT payments this week, ACCA has warned.

New rules, which came into action on January 1, have been issued by Customs & Excise which may oblige unwary sports club organisers to charge and pay VAT.

The aim is to distinguish sports clubs which are run for commercial gain from those which are organised by members for their own entertainment. But mutual clubs could be included inside the remit of the new rules, alongside profit-led ventures, if organisers do not act now to meet the new Customs & Excise guidance.

Chas Roy-Chowdhury, secretary to ACCA’s taxation committee, warned:’The new rules are designed to bring clubs which are run for commercial purposes within the scope of VAT. Customs has laid out specific exemptions so that mutual clubs can escape the provisions of being taxed. However, mutual club organisers will need to understand the changes. If they do not, VAT will be levied on member subscriptions or on services provided by the club.’

He said that clubs will need to ensure their constitutions specifically state that they are non-profit making establishments and that any profits realised can only be distributed on dissolution.

Sporting move by taxman gives British athletics half-million pound head start for Olympics

Related Articles

Inheritance tax is 'unfit for modern society' and should be abolished, says think tank

Personal Tax Inheritance tax is 'unfit for modern society' and should be abolished, says think tank

3w Alia Shoaib, Reporter
Rent-a-room relief – the survey says…

Personal Tax Rent-a-room relief – the survey says…

2m Helen Thornley, ATT Technical Officer
What should the OTS prioritise in its review of inheritance tax?

Personal Tax What should the OTS prioritise in its review of inheritance tax?

4m Alia Shoaib, Reporter
LITRG urges government to consider tax changes in disability work plan

Administration LITRG urges government to consider tax changes in disability work plan

5m Lucy Skoulding, Reporter
HMRC appeal rejected in Tottenham Hotspur case

Administration HMRC appeal rejected in Tottenham Hotspur case

6m Emma Smith, Managing Editor
HMRC urged to clarify impact of income allowances on Self-Assessments

Personal Tax HMRC urged to clarify impact of income allowances on Self-Assessments

7m Alia Shoaib, Reporter
New trading allowance: simplicity, but not as we know it

Administration New trading allowance: simplicity, but not as we know it

8m Emma Rawson, ATT Technical Officer
Wealthy individuals could circumvent top tax rate rises

Personal Tax Wealthy individuals could circumvent top tax rate rises

9m Alia Shoaib, Reporter