North Berwick Beats the VAT man

North Berwick golf club has helped secure a historic victory for players all over the UK with a multi-million victory over the taxman.

North Berwick is one of a handful of clubs that has been engaged in years of legal wrangling with HM Revenue and Customs over VAT to be paid on "green fees" for visiting, non-member, golfers.

The East Lothian club, along with counterparts Dorset, Berkshire, and Cheshire challenged the long-held practice with a tribunal now ruling the tax authorities got it wrong.

The finding has now opened the floodgates for hundreds of golf clubs to claim major rebates.

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.

One of the clubs involved in the case is due more than £125,000 from HMRC.

Judge John Brooks, sitting at the First-Tier Tax Tribunal, said golf clubs had lost large sums of money due to HMRC's wrong approach.

Clubs often choose to absorb VAT themselves, instead of charging it to visiting golfers, and profits were lost on rounds which would have been played had they been 20 per cent cheaper.

Judge Brooks ruled that 90 per cent of the VAT they paid on green fees should be refunded to them. The 10 per cent reduction was necessary to avoid the clubs being "unjustly enriched", he said.

The four clubs' claims were dealt with as "lead cases", but the tribunal's ruling will be good news for any non-profit-making club, which generates income from green fees.

A good day for golf then. More money for clubs and the chance of lower green fees!

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