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HMRC internal manual

VAT Sport Manual

Affiliation fees

Sports Governing Bodies-VAT treatment of affiliation fees

The Canterbury hockey clubs were members- only sports clubs to which, members paid an annual subscription for their membership rights. The hockey clubs were unincorporated associations without legal personality. They themselves were members of England Hockey, a non-profit- making organisation which existed for the encouragement and development of playing hockey. England Hockey charged affiliation fees in consideration for the service it provided to the hockey clubs.

It was originally HMRC’s policy that affiliation fees charged by sports governing bodies to their member sports clubs could only be treated as exempt in cases where the fee was calculated on a per person basis (provided that the services were closely linked to sport).In all other cases the fee would have been standard- rated as was the case with England Hockey, since the view was that its supplies were not made to individual persons.

That case went to the ECJ (Canterbury Hockey Clubs case[2008] (C-253/07)), which, ruled that in the context of persons taking part in sport, the exemption includes services supplied to corporate persons and to unincorporated associations, provided that the supplies are closely linked and essential to sport, that they are supplied by non-profit- making organisations, and that the true beneficiaries are individuals taking part in sport.

With effect from 1 September 2010, HMRC changed its treatment of such affiliation fees, and ,where the supplies are made by a non profit making organisation to a corporate body or unincorporated association the fees may be treated as exempt providing the services are closely linked and essential to sport and the true beneficiaries are persons taking part in sport.

This is the case irrespective of how the fee is calculated.

Supplies made to commercial profit-making organisations do not meet the true beneficiary test and will not fall within the exemption for supplies of services closely linked and essential to sport.