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HMRC internal manual

VAT Partial Exemption Guidance

From
HM Revenue & Customs
Updated
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Other Partial Exemption issues: sports club membership subscription

Input tax incurred by a sport body in respect to membership subscriptions is determined by the trading status of the sport club.

Following the CJEC decision in Card Protection Plan, where non-profit making sports clubs charge members a subscription that entitles them to a package of benefits, the supply would be treated as a single exempt supply. Hence any tax incurred in respect to the supply would be attributable to exempt input tax.

However, there is an extra statutory concession that allows non-profit making sports clubs who charge their members a subscription that entitles them to a package of benefits with different liabilities of VAT to apportion the subscription between the various elements as if there had been a multiple supply. Therefore, the tax incurred in respect to the supply should be attributed to either taxable or exempt depending on the liabilities of the supplies. Where the tax relates to both supplies, the input tax is residual and is recoverable according to the partial method in place.