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HMRC internal manual

VAT Sport Manual

Introduction: Background and General Description of the Exemption

This exemption was introduced on 1 April 1994 to implement a Directive exemption for “certain services closely linked to sport or physical education supplied by non-profit making organisations to persons taking part in sport or physical education” (Article 13A(1)(m) of Directive 2006/112 refers).

With effect from 1 January 2000, the Value Added Tax (Sport, Sports Competitions and Physical Education) Order 1999 (SI 1999 No 1994) linked the exemption to supplies made by an eligible body.

An eligible body (VSPORT2010) was defined in such a way that that commercial sports clubs could not artificially restructure their arrangements as non-profit-making bodies for the purpose of exempting their supplies.  In Chobham Golf Club (Decision No 14867), the club members themselves operated on a non-profit making basis but paid management fees to a management company and rent to the owner of the course, which had previously been operated as a proprietary golf course.  The legislation was intended to block exemption for such arrangements.

In order for exemption to apply, there are essentially three conditions that need to be met:

  1. They must be provided by a non-profit making body.
  2. The services must be supplied to persons taking part in sport.
  3. The services must be closely linked to sport.