Clubhouse refurbishment and attribution of input tax
InBedale Golf Club v HMRC[2015] UKFTT 446 (2 September 2015), the FTT found that costs incurred in refurbishing a clubhouse related not only to taxable supplies of food and drink, but also to an overall supply of golf membership.
The club had incurred input tax on costs for the refurbishment of its clubhouse. The issue was whether these costs were used exclusively in making taxable supplies of food and drink. HMRC argued that the input tax was residual, as it related to both taxable and exempt supplies (made under VATA 1994 Sch 9 Group 10 item 3), so that it was only partially recoverable.
The FTT observed that the position was the same as in Bridgnorth Golf Club v HMRC [2009] UKFTT 126. The clubhouse was at least in part a meeting place for golfers to manage, coordinate and enhance their golfing activities. Consequently, the availability of the bar and lounge area was an incidence of membership of the golf club, as well as a place to buy food and drink.
The FTT concluded that the bar and lounge area provided facilities which were ‘services closely linked with and essential to sport or physical education’ and were part of an overall supply of exempt golf club membership, the consideration for which was the membership subscription. The input tax incurred on the costs was therefore only partially recoverable.
Why it matters: Following Bridgnorth golf Club, this case confirms that a clubhouse is a place of ‘mixed use’; both taxable and exempt supplies take place there.
Clubhouse refurbishment and attribution of input tax
InBedale Golf Club v HMRC[2015] UKFTT 446 (2 September 2015), the FTT found that costs incurred in refurbishing a clubhouse related not only to taxable supplies of food and drink, but also to an overall supply of golf membership.
The club had incurred input tax on costs for the refurbishment of its clubhouse. The issue was whether these costs were used exclusively in making taxable supplies of food and drink. HMRC argued that the input tax was residual, as it related to both taxable and exempt supplies (made under VATA 1994 Sch 9 Group 10 item 3), so that it was only partially recoverable.
The FTT observed that the position was the same as in Bridgnorth Golf Club v HMRC [2009] UKFTT 126. The clubhouse was at least in part a meeting place for golfers to manage, coordinate and enhance their golfing activities. Consequently, the availability of the bar and lounge area was an incidence of membership of the golf club, as well as a place to buy food and drink.
The FTT concluded that the bar and lounge area provided facilities which were ‘services closely linked with and essential to sport or physical education’ and were part of an overall supply of exempt golf club membership, the consideration for which was the membership subscription. The input tax incurred on the costs was therefore only partially recoverable.
Why it matters: Following Bridgnorth golf Club, this case confirms that a clubhouse is a place of ‘mixed use’; both taxable and exempt supplies take place there.
