Golf clubs' sighs of relief may be short-lived

Commercial golf clubs will be feeling some relief following the collapse of a case taken by the British VAT authorities to charge VAT on golf subscriptions. Under British, Irish and European law, golf club subscriptions are exempt from VAT provided the club is a non-profit making organisation. But commercial clubs are expected to pay VAT on subs received. Many of these clubs have managed to sidestep the thorny issue, devising plans to avoid charging VAT on subscriptions. These schemes have been closely watched by the VAT authorities.

The British case was taken as a test and if successful could have opened the way for full-scale enforcement of VAT payments on club subscriptions. The tax authority in Britain has now decided to let the matter lie for the time being and has indicated it will not be making any appeal. It's not all good news though, true to form the British VAT office put a dampner on the celebrations. It has since announced it intends to shortly release proposals to change the law in order to prevent the use of VAT avoidance schemes by the commercial golf clubs in future.