Unwary 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

Share

Subscribe to get your daily business insights

Resources & Whitepapers

Why Professional Services Firms Should Ditch Folders and Embrace Metadata
Professional Services

Why Professional Services Firms Should Ditch Folders and Embrace Metadata

3y

Why Professional Services Firms Should Ditch Folde...

In the past decade, the professional services industry has transformed significantly. Digital disruptions, increased competition, and changing market ...

View resource
2 Vital keys to Remaining Competitive for Professional Services Firms

2 Vital keys to Remaining Competitive for Professional Services Firms

3y

2 Vital keys to Remaining Competitive for Professi...

In recent months, professional services firms are facing more pressure than ever to deliver value to clients. Often, clients look at the firms own inf...

View resource
Turn Accounts Payable into a value-engine
Accounting Firms

Turn Accounts Payable into a value-engine

3y

Turn Accounts Payable into a value-engine

In a world of instant results and automated workloads, the potential for AP to drive insights and transform results is enormous. But, if you’re still ...

View resource
Digital Links: A guide to MTD in 2021
Making Tax Digital

Digital Links: A guide to MTD in 2021

3y

Digital Links: A guide to MTD in 2021

The first phase of Making Tax Digital (MTD) saw the requirement for the digital submission of the VAT Return using compliant software. That’s now behi...

View resource