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HMRC internal manual

VAT Registration

Entity to be registered: clubs and associations: proprietary clubs

In a proprietary club, the property and funds of the club are not owned by the members, but by the proprietor(s). The members, under a contract between themselves and the owner of the club, pay an entrance fee and a subscription. In return for this, they are entitled to the use of club property and to any privileges under the terms of the contract. The members may also be entitled to some degree of control of the running of the club.

However, the essence of a proprietary club is that the proprietor is bound to retain in his own hands the power to make or vary rules (or at least a power of veto over any rules proposed by members in exercise of any authority which he may have delegated to them).

This may be an overt and declared right of the proprietor, or one ensured by a power given to him to appoint his own nominees to the majority of seats on the committee.

The status of the club may be checked by calling for copies of the constitution, rules and the articles and memoranda of association. The terms and details of these documents will spell out the way the club is organised and who is entitled to do what and to what property. This should allow you to make an informed decision about what sort of club it is.

You should be aware that it is entirely possible for a members’ club to operate within a proprietary club as a separate subsidiary entity to the proprietary club: see VATREG11700.

A proprietary club does not fall within the terms of section 46(3) of the VAT Act 1994 and registration should be in the name of the owner of the club (whether that be a sole proprietor, partnership or incorporated company) and the status for registration will depend on the status of the owner of the club.