A leading St Andrews golf organisation claims an English court ruling could lead to Scottish clubs enjoying significant cash windfalls.
The Scottish Golf Union (SGU) thinks pay-outs of up to £480,000 could be due after a court ruled that visitor green fees should not be subject to VAT. Floodgates could open after Bridport and West Dorset Golf Club won a tribunal against HM Revenue and Customs (HMRC).
It is understood that many clubs in Scotland are already lodging bids to reclaim large sums of tax. However, club officials have been urged to remain cautious, with HMRC understood to be considering an appeal of the English court’s decision.
Scottish Golf’s development manager Andy Salmon welcomed news of the potential windfall, saying, “The tribunal decision will be warmly received by many of the SGU and SLGA’s (Scottish Ladies Golf Association) affiliated clubs, some of whom could be set for a significant financial boost.
“We have been monitoring the situation closely with our partners at VAT services and keeping our member clubs informed of the progress.”
With the global economic downturn continuing to bite, Mr Salmon said news of a potential financial boost had come at the perfect time.
“Clubs have faced very challenging circumstances over the past three years, and those who have submitted claims no matter how small will hopefully benefit from this decision. We strongly urge clubs to take professional VAT advice to ensure that they are realising any opportunity that might exist as a result of this ruling.”
Gary Moore of VAT Services (Scotland) in Glasgow has been working with the SGU and SLGA for the past two years. Having lodged claims on behalf of 29 clubs, he expressed his satisfaction with the court ruling.
“This is fantastic news for golf clubs,” Mr Moore said. “Like many organisations, they have found it tough in the recession and this will be a very welcome boost.
“We always believed there was a good chance of a successful outcome and we have spent a lot of time preparing and submitting claims for our clients.”
He added that it was “not yet too late” for clubs to take action.
“The opportunity is still there to consider a claim for the last four years. However, we should also point out that while many clubs are set to benefit, not all will.”
The SGU and SLGA offer advice to affiliated golf clubs on a wide range of services as part of their supporting clubs programme from VAT legislation and child protection policies through to governance and membership marketing.
A series of updates has been given to clubs throughout the Bridport and West Dorset case, which was lodged in court in February. The crux of the English club’s case involved a claim that visitor fee income that is, cash paid by non-members should be exempt from VAT rather than “standard rated,” as it was viewed by HMRC.
Lorraine Parkin, head of indirect tax at Grant Thornton, described the tribunal’s findings as “significant,” saying hundreds of clubs could ultimately benefit.
HMRC has 56 days to appeal the decision.