Potential VAT windfall claims for clubs

Numerous not-for-profit sports clubs have recently enjoyed material windfalls from VAT previously declared on sales

wide shot of boats parked up on land outside club

Numerous not-for-profit sports clubs have recently enjoyed material windfalls from VAT previously declared on sales made at certain fundraising events held by the club during the last four years. This will principally be bar income from such events, but may also include ticket sales, catering and other supplies made.

The criteria to be met to enable an event to qualify for the relief are:

  • The event must be held to raise funds for the club and / or a registered charity. 
  • Attendees should be aware the event is being held to raise funds.

Events held for other organisations where they hire the function facilities of the club do not qualify such as private weddings, birthday parties, wakes etc.

Partial Exemption De minimis limits

The key is to ensure that income from the qualifying events can be exempt from VAT without exceeding certain limits (the Partial exemption limits) that potentially restrict the ability of the club to recover all VAT incurred on exempt related costs. These are called ‘Partial Exemption De minimis limits’ and enable the club to recover up to £7,500 exempt input tax per annum without restriction. HMRC require an annual Partial Exemption calculation to be submitted for each VAT year with the claim and all VAT incurred in each year to be attributed to taxable, exempt or partial recovery activities.

It is advisable to seek professional assistance when making such a claim.

As part of the RYA affiliated club package, clubs can access a 30-minute consultation underwritten by the RYA, with an external tax consultant. Any additional services provided will be charged with a RYA discounted price.

Sport VAT Consultant, Russell Moore, is able to offer his services to undertake all necessary tasks to assess, calculate, submit and manage the claim through HMRC.  His costs are on a no claim no fee basis at 20% of a settled claim.

An example - Sovereign Harbour, East Sussex

The club engaged Russell Moore on a ‘success only’ basis to assess, submit and manage a claim for VAT previously declared over a four-year period and were delighted when following review HMRC accepted and settled the claim in full. 

Club Director, Charles Herrod, commented: “Without Russell’s specialist knowledge we would have lost out on a real financial benefit for the club. The VAT rules are complex and without good advice we do struggle to make sure we are doing it right and optimising any possible reliefs. Russell was very helpful in managing the whole process and the outcome was a really great result! We continue to benefit from the relief going forward.”

Any club wishing to discuss this opportunity should contact Russell Moore russellmoore@sportsvat.co.uk | 07710 329317.