AGCO ramps up its tax campaign
By Seamus Rotherick
The Association of Golf Course Owners (AGCO) is dramatically stepping up its campaign to put pressure on politicians to reform tax legislation in golf.
Earlier this month the organisation met with top Treasury officials who, it has now emerged, were either not convinced by its arguments or are not prepared to act upon them at this stage.
This week, therefore, AGCO’s chair, Vivien Saunders, emailed its members, encouraging both them and the members of their golf clubs, to contact their local MP. In tandem, the organisation is also set to appoint a new barrister to act on its behalf, while Vivien, herself the proprietor of two golf clubs, is contemplating withholding the payment of VAT in an attempt to force the government’s hand.
AGCO has drafted two letters to be sent, both of which highlight the distortion between the VAT members of private members’ golf clubs pay on their annual subscriptions, of zero per cent, and what members of proprietary clubs pay, at 20 per cent.
The first letter, from golf club owners, highlights Royal Lytham & St Annes Golf Club in Lancashire, which is currently hosting the Open. ‘It charges £247 for a visiting golfer to play there on a Saturday and £195 for a one night break in the club’s hotel,’ states the letter. ‘It is still considered to be non-profit making and not subject to commercial influence. The members enjoy VAT exempt sport and this isn’t fair on us as a business.
‘Many small proprietary golf clubs will be driven out of business unless the distortion is removed. Would you, as our MP, press the Treasury to deal with this issue? Unless the Treasury eliminates the distortion we will have no option but to take this long-running issue to Europe.’
The second letter, to be sent by golf club members, states that their club is run in almost exactly the same way as a private members’ club, but ‘golfers prefer to pay at a club where the fees are cheaper’.
‘Members at this club have left to go to member-owned clubs because of this,’ it adds. ‘Why should we pay 20 per cent VAT on our golf when members at nearby clubs pay no VAT?’
AGCO has also been liaising with Eamon McNicholas, a barrister at Temple Tax Chambers, and is asking its members to donate money towards his fees, in order for him to lobby the Treasury. Earlier this year the organisation raised over £40,000 to fund Michael Sherry, another barrister, to represent the golf industry in the Chipping Sodbury case. AGCO is still using Michael, but wants to keep his services to be centred on that hearing.
In addition, Vivien has been speaking with Eamon about the possibility of not paying VAT as a protest.
“I am contemplating withholding VAT to force HM Revenue and Custom’s [HMRC] hand,” she said.
“In my case I am considering withholding the VAT at Abbotsley Golf Club on our squash memberships, par three course membership, squash court fees for members and non-members, and the fees for the pool tables. These are all sports’ fees and should be exempt from VAT on the basis of the distortion. I have put this to Eamon McNicholas. It would mean withholding the VAT but would be trivial amounts that would not get us into financial difficulties if we lost against HMRC.”
The increase in the campaign seems to be due to the Treasury being unconvinced by AGCO’s arguments during the meeting earlier this month.
“The Treasury wont seem to admit that there is a distortion,” admits Vivien. “They suggest they need more evidence.
“We discussed the possible application of ‘reduced rate VAT’ of five per cent, but they were not enthusiastic about that. We discussed applying it only to golf or removing the VAT exemption only from golf, and we explained that England Golf should not be seen as the voice of the whole of English golf.”
Vivien added that she is set to have further meetings with politicians and Treasury officials later this year.
“Michael Ramsay from Stockwood Vale Golf Club has received an invitation to the Treasury and I may attend with him,” she said.
“I also have a meeting with Sir Bob Russell, an Essex MP, coming up, while Philip Dunne, an MP in Shropshire, has invited me to meet him.”
By Seamus Rotherick
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Well Geoff we’re all obviously barking up the wrong tree then arnt we? If we get any sort of VAT reduction it obviously going to have a negative effect on us. Think I’d better forget all about it then.
Just one more thing about all the comments about here say, rumours misinformation etc, all the facts and figures about other clubs accounts and what they do or do not pay in tax have come from official club accounts submitted to HMRC.
So if there is any mIsinformation, it isn’t on my part.
This is all very amusing really. I only wanted to explain to the owners of prop. clubs that they were only being told half of the story. If HMRC decided to apply the rules on vat that apply to private clubs any benefit they received would be minimal. I’m sure their barristers will explain it to them eventually.
* calm not alm
Hi all – I take Brian and Mork’s points on board.
We have done a lot of tax stories over the last few months, and the results of the Bridport (due v soon) and Chipping Sodbury cases will be massive stories that we will cover. Maybe we will alm it down a bit.
Having said that we do get more demand and information for tax stories from readers than any other topic, and thanks to Google Analyitcs, we know the tax stories are very well read (basically anything to do with the power list, tax or Groupon gets about 20 times as many hits as anything else!)
Alistair Dunsmuir
I think your all being a bit hypocritical here. Peter, if it’s tedious then don’t read it or better still don’t post anything about it then these discussions do not take place.
To be honest with you Brian, I’m not bothered why Viven Saunders wrote anything about you, yes you may think these articles are boring but to be honest I’m bored of you whining on for an apology every time you see her name mentioned Which looking back through the stories, you do seem to add your comments every time it is.
It’s hard to disagree that this constant re-hashing of basically the same story is becoming a shade tiresome and perhaps Alistair and his team should consider scaling the coverage back a bit, thereby making the more newsworthy pieces surrounding this crusade a bit more interesting. I really do admire the energy and passion being put into this, but it’s not news every week surely. A huge amount of mis-information and a tendency for people to pass off their opinion as fact isn’t all that helpful either.
To sum up the trite nature of this article – “I am contemplating withholding VAT to force HM Revenue and Custom’s [HMRC] hand,” she said. Yes…..good luck with that…..
It’s difficult for me to be objective at times as I have such a low regard for the persona which is Vivien Saunders, someone I’ve never met but an individual who recently took it upon herself to publicly disparage me and a former employer of mine, whose relationship with HMRC she felt entitled to call into question. She subsequently saw fit to advise clubs against using my services, which many of my colleagues agreed was crass in the extreme. I thought so too, but have given up hope of an apology although I was advised by many not to expect one.
Before someone anonymous follows and tells me to “Get over it”, just consider whether Vivien Saunders wrote what she did about me because she thought it was acceptable or because she didn’t expect to be taken to task for it.
Your right it is tedius its time this blog stopped printing posts about it now some people just cut and pasteing things without knowing the facts and all being led on by V Saundars. Good stuff on here being ignored because of it too so come mods ditch the tax stories!
1.I am available for tax advice if you struggle to tell the difference between VAT and Corporation tax!
2. Please withdraw your comments that private clubs are acting illegally unless you have evidence.Tax evasion is a very serious allegation. If you have specific evidence it is of course your public duty to present this to the tax authorities.
3. One can only become a CASC and get the rates reduction if the beneficial ownership is dealt with as I previously pointed out. It appears that you committee members acquaintances have been a little limited in the facts they have provided you with.
Finally I dont think that members’ clubs are worried about profit making operations at all. It is just this constant whining based on half truths that is a bit tedious.
Yes Peter I am involved with a club that is trading at a profit, and I am totally focused on my club and business. From the information I have seen I am definitely not misrepresenting any facts.
In response to your facts:
1: Very few clubs have paid any corporation tax to allow them to claim any VAT back. HMRC are well aware of this.
2: If open comps do not create revenue then why do some clubs hold up to 5 a month? Judging by what some clubs declare on their annual accounts I wonder why they bother doing anything. Accounts are freely available to all on companycheck. One club declares taking over £800k in visitors fees, but didn’t pay any tax on it as they lost money taking those visitors. That, which ever way you look at it, is tax evasion.
3: There are many clubs claiming CASC, many of them neighbouring me. I know for a fact this is simply to reduce their rates bills. I know this to be true because I have been told face to face by their committee members that was the only reason to do so.
This matter is well and truly in the public eye at the moment so we’ll see what the courts and HMRC decide. What I don’t really understand though is, if proprietary clubs get a VAT reduction why are ‘private’ clubs so fussed about it? Unless of course they are very worried about it or maybe its just incase the taxman comes knocking.
One assumes that Jon has a stake in a club traded for profit. Perhaps if he focuses on his own business rather than misrepresenting the facts about others he might prospers better.
Fact 1. If a recovery of VAT is made as a result of the Bridport case, there will be a substantial clawback of associated input VAT from those clubs that make a successful claim.
Fact 2 tax is payable on profits not income. Most clubs holding Open competitions do not make a significant if any surplus on them.
Fact 3. Any club participating in the CASC scheme must amend its constitution to reflect the fact that any surplus of assets on winding up of the club will be paid to a registered charity or sports club. I am sure that if AGCO members eschew dividends and place their shareholdings in trusts with similar terms that they could choose to convert to a Community Amateur Sports Club.
Judging from your previous posts Geoff I would hazard a guess that you where in some way connected with a ‘private’ members club? You do seem to be very much against any change to the system. Is there any reason for this?
And I suppose you two both think its OK for private clubs to take as many visitors as possible and to make them ‘temporary members’ for the day thus avoid paying any tax on income?
And there’s nothing wrong with 380 golf clubs claiming CASC( http://www.cascinfo.co.uk/cascbenefits/golfclubregistrations)
after all they must deserve an 80% reduction on their business rates.
And of course all clubs should be entitled to hold a a few open comps every month and the proceeds of which should not be taxable.
And all clubs do deserve a share of the estimated £300 million they are trying to claim back through the Bridport and West Dorset case. Despite most not having paid any corporation tax or VAT in the first place.
The only people who think this system is fair are connected in some way to a private members golf club. Everyone else thinks its unfair and wrong.
Geoff, you claim that, Irrecoverable VAT is added to the members subs? So that would surely mean any monies taken would surely be knocked off the members subs? Sort of like a dividend? Which is exactly the argument with HMRC.
Well said Peter. AGCO pays for these expensive barristers to argue half the case. Or are they really ignorant that private clubs have an overhead called irrecoverable vat, you can rest assured that HM Rev &Customs know about it.
For those that are ignorant of it.. Add up total input vat on operating costs and then realise only approx30% can be recovered. The rest has to be added to members subs.
Dont forget that these clubs will be getting a full recovery on their input VAt. Private members clubs suffer significant irrecoverable VAT as a result of their partial exemption. To headline the argument as being a 20% difference is fallacious. But hey, never let the truth get in the way of a good story!