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HMRC internal manual

Company Taxation Manual

Particular bodies: clubs: associate members, visitors' fees, etc

The rules of a club (such as a members’ golf club) may provide for restricted categories of membership.  Junior members, for example, may have rights falling short of the rights of full members to hold office or vote at meetings.  If the restricted members’ subscriptions:

  • are fixed at a lower rate than the subscriptions of full members, and
  • are not intended to subsidise full members,

they will not normally be treated as trading income.

There is also no liability on payments by members in respect of their personal guests, even though these may be described as ‘visitors’ fees’.

Many clubs allow visitors or temporary members to use their facilities on payment of a commercial fee.  Where the amount charged covers the direct costs and overheads of the club’s facilities in proportion to their use by the visitors, it should be treated as trading income of the club - see Carlisle & Silloth Golf Club v Smith (1913) 6TC48 and 198.  This applies both to individuals who simply arrive at a club to use its facilities on a casual basis and to groups who may book such use in advance.

The description of such visitors as ‘temporary’ members of the club (for example, temporary membership of a golf club may form part of a holiday package) will not prevent receipts from being taxable.  Similar receipts from ‘associate’ members for their use of the club’s facilities will also be trading income unless it can be shown that their rights are equivalent to those of full members.  (These rights might include the right to vote at meetings, participate in club activities and generally to exercise control over the running of the club.)

Related expenses are deductible in computing assessable profits.  For example, in the case of golf clubs, a reasonable proportion of the course overheads may be deducted.

Other incidental trading receipts, such as non-member catering income, should be quantified in worthwhile cases.

Cases of doubt or difficulty, where the tax at stake is substantial, should be submitted to CTIS (Technical).