Club’s anger at operator’s charity status
By Seamus Rotherick
The management of a London golf club has launched a scathing attack on the charity status of Britain’s largest operator of pay-and-play golf courses, stating that this is bad for the taxpayer and for other golf clubs.
Trent Park Public Golf Course in North London has said that the charity status of Mytime Active is a “disgrace” as consumers do not get cheaper golf and commercial operators find themselves at a competitive disadvantage.
Mytime Active runs 19 golf clubs in the UK, and was this year awarded a 50-year contract to run all seven of Birmingham’s municipal courses, which, according to Birmingham City Council, has “safeguarded public golf for future generations” in the city. Mytime Active has since claimed that it has already invested more than £1 million in those seven facilities alone.
The organisation, originally known as Bromley Mytime, started managing selected leisure services for Bromley Council in 2004, and has since grown to enjoy a turnover of £33 million and deliver an array of leisure, golf and health services for local authorities and primary care trusts.
However, as a charity, it can qualify for a number of tax concessions surrounding, for example, business rates, corporation tax and capital gains tax.
According to Trent Park, this charity status gives the 19 clubs operated by Mytime Active a competitive advantage over other golf clubs.
“It has been the UK taxpayer that has invested a million pounds in Birmingham’s municipal golf courses,” said a spokesman.
“Under the cover of their so-called ‘not-for-profit’ status, which affords Mytime Active tax concessions in the form of no VAT, no corporation tax and no business rates, Mytime Active has now built the largest presence in the commercial golf sector to the detriment of both the UK taxpayer who is subsidising them and taxpaying golf operators like ourselves.
“We cannot compete on acquisitions or operations with these outrageous state-funded subsidies.
“The recent purchase of Orpington Golf Centre will cost HM Revenue & Customs [HMRC] approximately £350,000 per annum in lost revenues which are being reinvested in acquiring other commercial facilities like these Birmingham courses, which results in further huge revenue losses annually to HMRC and erosion of the tax base.
“This is a disgraceful situation particularly as there is no obvious benefit to consumers who find themselves paying no less for their golf following a Mytime takeover. The only beneficiaries being their highly-paid salaried executives and golf course landlords.”
According to its website, Mytime Active is a social enterprise and charity that invests “every penny of surplus back into the business – just over £16 million to date.”
That money, it states, does not maximise profits for shareholders or owners, but is “reinvested in the business or in the community.”
It adds: “Through a combination of business acumen, best practice and a community ethos, we have enjoyed rapid growth. As a social enterprise, we are a business with social objectives and are constantly investing in new equipment, better standards in our facilities and refurbishments at our golf courses.”
By Seamus Rotherick
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Golf Clubs could learn an incredible amount from the “third sector” or charitable organisations on how to run their businesses/clubs.
If your club can over come the administrative and organisational resistance the benefits are clear.
I have worked in programme management for a local government department and I can assure you of all the millions (£) we distributed to organisations and companies, golf clubs would never be considered. That would be completely different if they had a charitable status or group involved.
Trent Park GC response below
“Thank you for your response.
In our opinion it is wholly unrealistic for UKGCOA, and the industry to be arguing for a 5 % rate of VAT in these tough economic times. Much more sensible to seek to persuade HMRC to simply withdraw the VAT exemption for Golf entirely (so that everyone pays their way at 20% ) on the grounds that it creates enormous unfair distortion and is contrary to EU law. The country needs the money and I don’t believe most people have a problem paying VAT if its imposed on us all.
As for England Golf we might be persuaded they are representing the whole industry if they kick in £120,000 to help HMRC win the Bridport GC appeal ! Unless this is won by HMRC the distortion issue on Green Fee income will become even worse but there is little chance of England Golf helping us here !
We are pinning our hopes on MP’s and HMRC finally waking up to the massive distortions on VAT, Corp Tax, CASC and Not for Profits, which is destroying the tax base of golf and killing fair competition. Perversely it may take an HMRC loss of the Bridport GC case and consequent huge £300m refund to Private Clubs (which the Country and HMRC can ill-afford at this time) to finally get some action taken by HMRC on the distortion issues and hopefully the VAT exemption lifted so everyone pays their way !
Go HMRC !”
Further response from UKGCOA below
“What many not-for-profit clubs do not realise is that if we were successful in persuading the law-makers that we should have a common, low rate of VAT for the participation in sport (currently this low rate in the UK is 5% as you know) as they do in many other countries across Europe, this would enable all clubs to recover more VAT on their supplies than they can currently under partial exemption rules, so whilst their members may pay a little more for their membership (no great hardship I am sure you will agree), their costs will reduce, so it is likely many not-for-profit clubs may will be better off than they are currently and the whole industry will enjoy a level playing-field of taxation.
Some visionary not-for-profit clubs can see this (as can England Golf) and hence we are aligned together in this strategy, as we believe that this will be fair for all types of golf club, and the golfer will pay the same rate of tax on their golf, irrespective of the type of club where they play.
Therefore, we contend that this makes a great deal of sense to those who see this can see the value of the strategy. It is true to say that not all not-for-profit clubs will be better off, but the considered wisdom of those who know a great deal more about VAT than I do suggest that this is indeed the case. So, it is not (as you suggest) that our strategy will harm not-for-profit clubs in general, it may harm some, but the greater good of a fairer taxation system for most will prevail.
We disagree that England Golf “only support Private Clubs” – if that is the case, why would they have invested over £120,000 in bringing the Chipping Sodbury case to tribunal?
We hope you will reconsider resigning your membership – we value your participation and assure you that we are working very hard to represent the proprietary sector’s interests in discussions with golf’s governing bodies and the law-makers. We will hunt the ‘foxes’, but members clubs are not foxes, they are just a different breed of chicken.
We believe the ‘foxes’ are the law-makers and politicians that create and enforce a framework of legislation and taxation that favours one breed of chicken over another.”
Response received from UKGCOA and Trent Park response below for your information.
“Many thanks for your email.
I am sorry that you feel that Mytime Active should not be members of the UKGCOA, but our Constitution allows for all types of golf course owners to become members. Indeed we have two member-owned clubs in membership already, and it is very pleasing to see that these two clubs, along with Mytime Active support our campaign for a fairer taxation system in UK golf.
Membership of the UKGCOA is open to all those individuals that are sole traders, partners or shareholders in companies that not only own golf courses, but also who are sole traders, partners or shareholders in companies that lease/rent golf courses from a landowner. I feel sure that you will understand that we cannot restrict membership to one business model – for example a limited company. Many golf courses are owned by sole traders, partnerships and of course clubs and associations whose members are in fact a shareholder in the ownership. We believe that all of these types of businesses will benefit from such initiatives that we are able to offer like benchmarking, purchasing and other commercial activity which we offer to our members.
The board of the UKGCOA has always believed that whilst we may do whatever we can to campaign for a fairer taxation system, this must not be our sole focus, as it may take several years for any changes to the taxation system to be agreed and implemented – as you know, some people have been campaigning on this issue for 20 years or more, and it may be a long time before owners see any benefit from such campaigning. In the meantime, the UKGCOA intends to help its members as much as it can with practical help to manage their businesses more effectively and efficiently and although it is likely that the vast majority of our membership will be from the proprietary sector, should anyone from the not-for-profit sector wish to join, they would be welcome to do so.
The UKGCOA do not believe that the not-for-profit clubs are the ‘enemy’ that we must fight. The true ‘enemy’ is the established system of government and legislation that believes that all sport is delivered by not-for-profit clubs, which we know is plainly not true and we are pleased that this view is shared by England Golf, the largest and most influential of the six governing bodies that are responsible to the government for golf in the United Kingdom. The UKGCOA will do all that we can to represent the commercially-minded owners and operators of golf courses on a range of issues that affect their business – and issues like growing the game are therefore just as important as VAT inequality, if not more so.
I hope this has been able to explain our position on membership, and I will certainly bring your views to the attention of the board of directors for their consideration. I will be happy to discuss this with you at any time if you wish – I can call you or meet you if you prefer, just let me know.”
Response by Trent Park Golf Club
“Thank you for your response.
I clearly did not read the constitution before joining but certainly had the impression that UKGCOA was formed to promote the interests of commercial tax paying clubs only (in all their forms of incorporation) ! I stand corrected.
However I believe it is a huge mistake to admit private clubs and not for profits and do not buy the line that they are in favour or supportive of changes to the taxation of golf that can only harm them ! That makes no sense whatever they may claim ! They are the entrenched enemy on these important taxation issues and I liken your decision to admit them to UKGCOA as like putting a fox into the chicken coup !
We already have the EGU who claim to represent the whole sector but in reality only support the Private Clubs so I believe you will also lose all credibility with Proprietary Clubs on the main issue that affects them (fair taxation) if you claim likewise and unless you change your admittance policy.
Regrettably under the circumstances we feel we have no option but to resign our Membership from UKGCOA with immediate effect. We will rejoin (if we are allowed to !) only when it becomes your policy to hunt foxes ! “
Absolutely disgusted to receive an email today from the UK Golf Course Owners Association (UKGCOA) informing members that Mytime Golf have been admitted as Members of the UKGCOA. What on earth the board think they are doing admitting to the membership an organisation that is fast destroying the competitiveness of the Proprietary Golf Sector, who make up the bulk of the Membership of UKGCOA, God only knows. Maybe the Board of UKGCOA is asleep at the wheel. Sure the membership subs from Mytime is useful income but it wholly undermines the credibility of the UKGCOA to represent the interests of the Proprietary Golf Sector in their discussions with HMRC regarding Fair taxation for Golf. We, and no doubt many other individual Proprietary Club Owners will certainly be reassessing whether to renew our Membership of this now wholly conflicted Organisation.
I’m not sure that many people let alone HMRC or the Government have woken up to the potential implications for the Golf industry. If Mytime carry on acquiring commercial golf facilities at the present rate then it wont be long before the whole industry is paying virtually no Tax – except us mugs operating as Proprietary Clubs. It is already the case that Mytime can outbid any commercial operator for any golf assets. In the case of Orpington GC,where Trent Park GC was the underbidder, what was formerly the largest pay and play facility in Europe and one of the most profitable, is now in the hands of a “so called” charity who pay no tax at all, at a cost to HMRC of approx 350 grand a year in lost business rates, lost VAT and lost Corporation Tax. This is an utter disgrace. Does the government and HMRC really want to see the whole industry falling into the hands of ” not for profits” ? If it does then at least do the decent thing and level the playing field for everyone including Proprietary Clubs who are now in a vice like squeeze between the non tax paying Private Clubs and these so called Not for Profits.
It’s about time somebody exposed this ‘charitable staus’ nonsense! My company successfully operated a municipal golf course for Maidstone Borough Council for 14 years before losing out in an unfair tender situation to Bromley Mytime.
You would think that a government starved of tax revenues would be able to see the downside of a so called ‘charity’ tendering for commercial contracts.
Ridiculous!!
Paul Street
Managing Director
Medway Golf Centre Ltd
Hey Paul,
Hope the Streets are well!!
Just bought a load of prizes off click golf for my charity golf day for William Syndrome I have on October 19th. We have around 45 playing golf and half a dozen more for evening. Just wondered if you had any literature etc you wanted to send over that I can plaster round Tudor Park or if you wanted/could sponsor a hole or a prize through any of your empire? No worries if its not something you do.
Nick
No offense taken at all on my part, it was just that never having heard of your club, your turn of phrase didn’t do much to help your credibility.
Thanks for the apology anyhow, another couple of individuals would go up in my estimations if they were to do the same for remarks made on the same thread.
Never having met Brian Inglis it was rude of us to call him an “old fart”. We unreservedly apologise for any offence caused to Brian personally.
Never short of an opinion is Trent Park, here’s a gem from last week which caught my attention……
“The arrogance of old farts like Brian Inglis and the British Golf Establishment is breathtaking.”
How can you argue with insight and commentary like that?