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Where Taxpayers and Advisers Meet

Bowling Club VAT questions...

Alcosaint
Posts:20
Joined:Wed Aug 06, 2008 3:42 pm
Bowling Club VAT questions...

Postby Alcosaint » Tue Jun 16, 2009 9:57 am

I've just picked up some work for a bowling club and have a couple of questions....

1. Full fees, (say) £100pa, allow use of greens, equipment and bar, but little else. Assoc fees (say) £20pa allow entry to bar, but nothing else. Reading up on VAT notice 701/45 it seems to me that the assoc membership fees are standard rated and the full membership fees need to be apportioned; 80% exempt, 20% standard rated. Has anyone seen this kind of thing before? Could it be argued that the main purpose of the full fees is bowling, not drinking (incidental) and that the whole of the full fees could be exempt?

2. If I assume that some or all of the full membership fees are exempt for the time being... does that mean that some or all of the expenditure needs to be treated as exempt and not therefore recoverable? Specifically I'm thinking about a fair bit of VAT on bowling green maintenance - i.e. if full memb fees are exempt does this mean the VAT on green maint costs cannot be treated as input tax?

Will be very grateful for some help here...... thanks in advance.

SeanJames
Posts:165
Joined:Sun Jan 18, 2009 10:13 am

Re: Bowling Club VAT questions...

Postby SeanJames » Tue Jun 16, 2009 5:27 pm

Hello,

Just looking at this now, and the conditions in section 2.1 of 701/45 also state that the organisation must be an eligible body? Before I look into this in detail, can you confirm that they do meet the conditions of being an eligible body in section 4?

If they don't, then the supply is standard-rated regardless.

Cheers
Sean

Alcosaint
Posts:20
Joined:Wed Aug 06, 2008 3:42 pm

Re: Bowling Club VAT questions...

Postby Alcosaint » Wed Jun 17, 2009 11:20 am

Hi Sean

Thanks for the reply and yes.. the club does qualify as an eligible body (not for profit, appropriate clauses in constitution, surpluses reinvested in club and no commercial influence).

Regards

Al

SeanJames
Posts:165
Joined:Sun Jan 18, 2009 10:13 am

Re: Bowling Club VAT questions...

Postby SeanJames » Sun Jun 21, 2009 9:16 am

Hello,

(sorry for delay in replying)

I've seen apportionment's with sporting clubs before, but generally only where they have written in to HMRC to seek an agreed apportionment based on what they do. To be honest, the area is a complete minefield, and by looking around there is no set precedent that I can find that would help out. You've got the right idea behind it from your reading of 71/45, but whether HMRC would see it that way too would be up to your client to prove.

And yes, if some of the fees are treated as exempt, then some of the VAT may not be recoverable and the club (or yourself) would need to look at the partial exemption rules to see whether any of the VAT in direct relation to exempt supplies, or VAT in relation to their residual (covers taxable and exempt supplies) can be recovered at all.

Cheers
Sean

Alcosaint
Posts:20
Joined:Wed Aug 06, 2008 3:42 pm

Re: Bowling Club VAT questions...

Postby Alcosaint » Tue Jun 23, 2009 9:56 am

Thanks for taking a look Sean (and for your reply on a Sunday morning, no less!)

Al


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