Cheap round of golf tax decision referred to European Court of Justice

Judges in Luxembourg will help decide whether a round of golf will become a little cheaper following a decision by the Upper Tax Tribunal to refer a case to the European Court of Justice (ECJ) for an opinion.

The decision relates to VAT on green fees charged by members-only golf clubs on visiting golfers, in a case brought by Bridport and West Dorset Golf Club. The Club argued that VAT on green fees, which are exempt from VAT for club members, should also be exempt from VAT for visiting golfers. HMRC disagreed and insist that VAT continue to be charged.

The First Tier Tax Tribunal agreed with Bridport and West Dorset Golf Club that supplies to non-members of green fees should be exempt. This decision was welcomed by golfers visiting members-only clubs because it introduced the prospect of their round being 20% cheaper.

However, HMRC responded by seeking permission to appeal to the Upper Tier Tax Tribunal, which a year after the First Tier Tax Tribunal decision, has now referred the case to the ECJ for an opinion. If the eventual decision goes in favour of Bridport and West Dorset Golf Club it could have wide implications.

Ruth Corkin, Head of VAT Services at accountants and business advisers James Cowper Kreston explained: “Although this decision is for members only golf clubs where those clubs cannot distribute their profits and are essentially run on a voluntary basis, I can see that it would have wider application to other sports clubs run on similar lines if they are charging fees plus VAT to visitors to play. Examples could include sailing, snooker, tennis and bowls clubs.”

Proprietary golf clubs (i.e. those that can distribute profits etc) may also get a change to the rules on fees if the Tribunal decides in favour of Chipping Sodbury Golf Club. This case was heard at the end of May and the decision is expected shortly.

The ECJ is expecting to hear the case in the summer of 2013, so Ruth recommends that golf clubs having to charge and account for VAT on visitor green fees make what is known as a protective claim with their regular VAT payments if they are not doing so already. 

Ruth explains: “A protective claim will allow a club to successfully reclaim any VAT paid if HMRC loses its appeal.”

Ruth Corkin, Head of VAT services, James Cowper Kreston LLP, Tel +44 (0)1865 861166 or email