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Potential VAT Opportunity for Golf Clubs

Apply for a temporary retrospective partial exemption special method.

Background

HMRC recently released a Revenue & Customs Brief (04/2021), which can be accessed here. HMRC explained the purpose of the Brief was to highlight an accelerated process for VAT registered businesses (including golf clubs) to request temporary alterations to their partial exemption methods to reflect changes to their business practices because of the Covid-19 pandemic.

This Brief explains where the nature of the supplies you make has changed as a result of Covid-19, but your business anticipates moving back toward a pre-pandemic position in due course, then HMRC is likely to accept proposals which use representative income streams from the previous tax year to get a fair and reasonable recovery rate.

In the last week VAT Services (Scotland) Limited have submitted requests for temporary partial exemption special methods for five golf clubs.  These have all been acknowledged by HMRC but as yet not processed.  For each club we submitted six appendices to ensure HMRC had all the relevant information to make a prompt decision on each club’s request. 

Next steps

VAT Services (Scotland) Limited recommend you compare your partial exemption VAT recovery % for 2019 to that for 2020.  Should your % decrease from 2019 to 2020 you should consider if you wish to submit a request to HMRC for a temporary retrospective partial exemption special method.  This should clearly show the effect the request would have on the 2020 figures should HMRC agree and the reasoning for the decrease in taxable income from 2019 to 2020, i.e., you cannot say Covid-19, you require to explain how and why your taxable % has decreased.

To allow HMRC to accelerate the process (HMRC’s words, not ours) HMRC is looking for businesses to send requests to the following email address: [email protected]

Should you wish to discuss the above in more detail, or perhaps wish VAT Services (Scotland) Limited assistance in submitting a request to HMRC, they would be delighted to assist.  Gary Moore of VAT Services (Scotland) Limited can be contacted on 0141 636 9353 or at [email protected]

In 2016 Gary successfully negotiated with HMRC the recovery of just over £3.5m for 41 golf clubs where VAT had been overpaid by golf clubs on income received from visitors and member guests.  More detail can be found here.