VAT is a complicated subject at the best of times, but being a Membership Sports Club can confuse matters further. Here we have put together a few simple Questions and Answers to help you get it right. We have taken advice from the UK's HMRC, but it is always better to check things out with your tax office.
We have split this advice in to two areas. The first area is EPoS Loyalty Systems and their use in your retail, food and beverage operations. This advice is not affected by your status. Therefore municipal, profit making and member clubs should be treated in exactly the same way.
Q1: If we run a levy system, should we charge VAT on our 'Card Levy'?
A1: NO. The 'tax point' for any transaction is the date and time when the funds are used and/or forfeited. This transaction in your accounts is EXEMPT from VAT.
Q2: If we insist that our members use the funds on their card before a particular date, then deduct balances from their card, is VAT due on that money.
A2: This forfeit is considered as part of their subscription and VAT should be paid acording to their membership category and your club status.
Q3: When the member uses his/her card for purchases, how much VAT is payable by the club on that transaction?
A3: If you are giving a discount, that discount is deducted before the calculation of VAT. Therefore a £2.00 Drink is reduced by 10% to £1.80, VAT is paid on the nett amount, i.e. £1.53, meaning 27p.
The second area we look at is Membership Subscriptions and the Charging of VAT. Under EU regulations, VAT is not chargeable on subscription of most 'sporting' memberships of 'members' clubs.
Q1: What is my status? We don't own our course or clubhouse, but run the club ourselves.
A1: In most cases this would mean that you are a members' club, and VAT would not be chargeable on the subscription paid to you for the services the club provide. Any payments made to you for services provided by the owner of the course would be VATable if they we being passed on to the owner.
Q2: We have lots of different membership categories. Which ones are exempt?
A2: Only sporting subscriptions are exempt. Social subs attract VAT at the standard rate.
Q3: We are a members' club and have a levy card system. No VAT is charged on subs, so is any charged on card 'use it or lose it' forfeits?
A:3 VAT is charged as if the forfeit was an extra subscription. Therefore any money taken from social members' cards would be VATable, and playing members exempt.
UK - HM Revenue & Customs - Click here for pages relating to sports clubs, their status and taxation.
Irish Republic - Revenue - Tax & Customs - Click here for pages relating to golf clubs, their status and taxation.