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HMRC internal manual

VAT Business/Non-Business Manual

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HM Revenue & Customs
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Clubs and associations: deemed business

Section 94(2)(a) of the VAT Act sets out certain activities of clubs and associations which are always to be treated as business for VAT purposes. Section 94(2)(a) states that:

Without prejudice to the generality of anything else in this Act the following are deemed to be the carrying on of a business -

(a) the provision by a club, association or organisation (for a subscription or other consideration) of the facilities or advantages available to its members.

Therefore, for its membership activity to be deemed to be business (and therefore give rise to taxable supplies), a body must:

  • be a club, association, or other organisation;
  • receive a subscription or other consideration from its members; and
  • provide facilities or advantages for its members in return for that subscription or other consideration.

For an organisation to be accepted as a club or association for the purposes of section 94(2)(a) of the VAT Act, it must have most, if not all, of the following features:

  • the organisation should be a body, unincorporated or corporate, membership of which is voluntary;
  • the organisation and administration of the body should be governed by written rules or articles;
  • a committee or secretariat, elected by members (in the case of a members’ club) should have responsibility for running the club’s affairs;
  • in the case of a members’ club the amount of the subscription will be determined by agreement within the club;
  • the club will have an aim of promoting a type of activity or pursuit;
  • payment of a subscription or other type of consideration will be compulsory for the provision of facilities.

An organisation does not have to have permanent premises or accommodation. However, it is not sufficient for the organisation to call itself a club. You must look at its structure and activities to see to what extent the above features are apparent.

This view is based upon legal advice which HMRC received after the decision in Nottingham Fire Service Messing Club. (See VBNB75920).

Section 94(2)(a) VAT Act 1994 talks of other organisations. HMRC sees this as covering, for example, companies and associations where the membership is made up of other organisations.