Clubs set to cash in on VAT refund

AFTER several years of legal wrangling, HMRC has agreed to make substantial payments to hundreds of private members’ golf clubs for overpaid VAT within the next two months.

However, as Golf Club Management predicted last month, the organisation will only pay up to 50 per cent of what the recipient golf clubs think they are owed. Some golf clubs will only receive one third of what they believe they are owed.

Discussions over what will happen to the remainder of the money are set to continue for many more months to come.

The case follows the 2013 Court of Justice of the European Union (CJEU) ruling, itself the culmination of years of legal battles, that VAT on green fees at private members’ golf clubs had been incorrectly applied for several years. This meant that scores of ‘not for profit’ clubs were able to claim the VAT back on green fees – believed to be worth several thousands of pounds to many of the venues involved.

HMRC had been reluctant to pay the VAT back but it has now agreed to make interim payments of up to 50 percent of overpaid VAT on non-member green fees at private members’ golf clubs by this April, following an announcement at the Royal Courts of Justice in London.

Discussions between KPMG, which is representing many of the golf clubs involved, and HMRC, will continue about how much extra money should be paid to clubs as HMRC confirmed at the courts that it wishes to invoke a defence of partial unjust enrichment, and if no agreement is reached a further High Court hearing will be scheduled in the summer. HMRC is also due to provide an ‘information sheet’ by February 9, which should give clubs a better idea of how much of a repayment to expect by April.

“HMRC will apply a provisional unjust enrichment restriction to the claims and make an interim payment plus simple interest,” said a spokesman for the GCMA.

“For the majority of clubs, this restriction will be 50 percent of the value of the final claim. For a small number of clubs there will be a restriction of 67 percent of the final claim. Whether a club will receive 50 or 67 percent depends on a number of factors but the higher restriction is likely to be associated with the highest green fees and thereby highest claim value. HMRC will have 30 days to make the interim payment once the final claim amount is agreed.”






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