HMRC has confirmed that supplies by local authorities of leisure services can be treated as non-business activities for VAT purposes. Revenue and Customs Brief 3/23: changes to VAT treatment of local authority leisure services confirms the change of policy, following a number of tribunal cases which HMRC is no longer challenging. As a result, supplies of sports and leisure services by local authorities can be treated as non-business, meaning that local authorities can submit claims for overpaid output tax. HMRC notes that other income received at council leisure facilities (e.g. from sales of sporting goods or items from vending machines) remains subject to VAT.
Previously, local authorities were treated as undertaking a business activity if they provided leisure services to the public.
HMRC has confirmed that supplies by local authorities of leisure services can be treated as non-business activities for VAT purposes. Revenue and Customs Brief 3/23: changes to VAT treatment of local authority leisure services confirms the change of policy, following a number of tribunal cases which HMRC is no longer challenging. As a result, supplies of sports and leisure services by local authorities can be treated as non-business, meaning that local authorities can submit claims for overpaid output tax. HMRC notes that other income received at council leisure facilities (e.g. from sales of sporting goods or items from vending machines) remains subject to VAT.
Previously, local authorities were treated as undertaking a business activity if they provided leisure services to the public.
