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Golf Clubs Score Multi-Million-Pound Victory in ‘Green Fees’ Tax Dispute

PLEASE NOTE: Information in this article is correct at the time of publication, please contact DFA Law for current advice on older articles.

The tax authorities do not always get it right and good legal advice can often result in rebates. In one landmark case, golf clubs all over the country won the right to VAT refunds running into millions of pounds after the tax was wrongly levied on ‘green fees’ charged to visiting golfers.

Non-profit-making golf clubs had accounted for VAT on green fees for many years until one of their number complained and won a ruling from the European Court of Justice in 2011 that they fell within the sporting exemption enshrined within Article 132 of the Principal VAT Directive.

That decision opened the way for the club, and many others in the same position, to claim substantial rebates. Four clubs were selected as representative of all the others and issues relating to the quantification of the rebates due came before the First-tier Tribunal (FTT).

Many golf clubs had lost large sums of money due to HM Revenue and Customs’ mistaken approach. They had often chosen to absorb VAT themselves, rather than charging it to visiting players, and substantial profits were lost on rounds of golf which would have been played had they been cheaper.

The FTT found that that the four lead clubs should recover 90 per cent of the VAT they had accounted for on green fees. The 10 per cent reduction was necessary to avoid the clubs being unjustly enriched. In the case of the club which spearheaded the case alone, the rebate came to more than £125,000.

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