A. Not necessarily; the liability of sporting services depends on the status of the supplier.
The supply by an eligible body to an individual of services closely linked with and essential to sport or physical education in which the individual is taking part is exempt from VAT (VATA 1994, Schedule 9, Group 10, item 3).
The definition of an eligible body is a non-profit making body which:
- is precluded from distributing any profit it makes, or is allowed to distribute any such profit by means only of distributions to a non-profit making body
- applies in accordance with Note (2B) any profits it makes from supplies of a description within item 2 or 3 and
- is not subject to commercial influence
Note (2B) states that the application of profits must be for the continuance or improvement of the facilities made available by that body and for the purposes of the body.
If your client meets the definition of an eligible body, the playing subscriptions and green fees will be exempt from VAT and excluded from turnover when comparing to the VAT registration threshold. The bar sales and any social memberships are taxable supplies, but because the taxable income is only £50,000 then that client does not need to VAT register.
The reason for the other golf club being VAT registered is its limited company status. As a commercial enterprise, rather than an eligible body, all of its memberships, green fees and bar sales are taxable supplies and standard rated.
If you have a VAT query on the exemption for sporting services, why not contact the VAT Advice Line on 0844 892 2470 to discuss it. Our team of experts have a wealth of experience and can also provide a written consultancy service at £180 per hour plus VAT.
