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HMRC internal manual

VAT Business/Non-Business Manual

Legal history: cases about clubs and associations

Please note that the following material is not a full summary of the case - it merely highlights the principle referred to in the appropriate section of this manual.

Blackmoor Golf Club VTD 2027

The club rented its golf course from an associated company, Blackmoor Links Ltd. Nearly all members had to make an interest-free loan to the company. The tribunal found that the loan to the company was part of the consideration for the supply of facilities by the club.

Exeter Golf and Country Club Ltd 1981 STC 211

The Exeter Golf and Country Club asked its members to make interest-free loans to it to raise additional funds. HMRC assessed on the basis that the loans were non-monetary consideration for membership supplies. This consideration had to be valued at open market value. HMRC determined that value by calculating the interest that would have been payable on an equivalent loan from a bank. The Court of Appeal upheld the assessment.

Institute of Leisure & Amenity Management 1988 STC 602

In this case the Judge said about the term civic nature, “In my judgement, the expression does not include organisations which aim to provide everyday and generally expected municipal services which in modern conditions include the provision of parks, leisure centres and similar facilities”.

It was also considered that ‘profession’ and ‘professional’ should be given a relatively narrow meaning. The meaning should be restricted to what is generally understood to be a profession.

Largs Golf Club 1985 STC 226

Members of the club had to buy a unit issued by the trustees of a separate Development Trust. The Court of Session found that the acquisition of a unit constituted consideration.

Nottingham Fire Service Messing Club VTD 348

The fire service provided a canteen, cooking equipment and cooks at a fire station. An operational fireman was paid £1 a week to act as mess manager. The mess manager signed off the accounts of the canteen, which was described as a club, although there was no constitution, committee, officers or rules. Prices were fixed to cover the cost of the food supplied. Anyone at the fire station could use the canteen.

The tribunal held that the canteen was not run by a club or organisation. It therefore did not have to register separately for VAT. The tribunal found that the canteen was run by the mess manager acting as an employee or agent for the fire service.

Tron Theatre Ltd 1994 STC 177

A company that promoted drama was registered as a charity. It requested sponsorship for seats in its theatre for £150. In return sponsors would get priority booking for two gala evenings, acknowledgment of their sponsorship on the seats and acknowledgment on a board in the theatre foyer.

The Court of Session agreed that the supply was taxable because the company would not have provided the goods and services for less than the £150 that the sponsors paid. Therefore the whole of the £150 was consideration in money under what is now section 19(2), VAT Act 1994.