VAT News

Treatment of Affiliation Fees


A number of golf clubs (Abbotsley, Cromwell, Cambridge Meridian TC 04781) have appealed to the FTT regarding the treatment of affiliation fees received from England Golf and local golf unions. The golf clubs recharged the fees to members and HMRC argued that these were either exempt when recharged by members’ clubs or standard rated if recharged by a proprietary club.  The golf clubs argued that the recharge of fees to members was either a disbursement or if not that there was an unfair distortion of competition in applying exemption for members’ clubs.

 The FTT found that the recharges were not disbursements as they were not incurred by the clubs in the name of specific identifiable members and responsibility for payment was with the clubs rather than the member.  The FTT also decided that any distortion of competition occurred because of the application of the Sporting Exemption and was intended by the Directive under which the exemption was made.  It therefore declined the golf clubs’ application for the issue to be referred to the ECJ.

The main purpose of the Tribunal appears to be for the golf clubs to demonstrate the potential distortion of competition between proprietary clubs and members’ clubs and how this impacts when recharging affiliation fees i.e. standard rated and exempt respectively.  However, these recharges could have been treated as disbursements by the proprietary clubs if the various requirements had been met.

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