Blog Search

Archives

HMRC clarify VAT treatment of affiliation fees for sports clubs

HMRC recently published a reminder that the concession enabling clubs to treat affiliation fees as exempt from VAT, will be withdrawn with effect from 1 April 2018.

A sport’s governing body, or similar umbrella organisation, often charges an affiliation fee to individual clubs who make an onward charge to their members. Where the clubs are non-profit making, the supply of this affiliation fee to their individual members is exempt from VAT. However, if the club is a profit-making commercial club, then the supply to their individual member is standard rated.

The concession aimed to put profit-making commercial clubs in a similar position to non-profit making clubs, so that they didn’t need to account for output tax on the fee charged. It achieved this by allowing profit-making commercial clubs to treat these re-charges to their members as though they were disbursements. However, as such re-charges of affiliation fees aren’t legally disbursements, the concession goes beyond HMRC’s discretion and is being withdrawn with effect from 1 April 2018.

Withdrawal of the concession means that the onward charge of the affiliation fee will be liable to VAT at the standard rate of 20%, unless it meets the conditions of a disbursement.

There will be no impact on the VAT treatment of affiliation fees by non-profit making sports governing bodies, or similar umbrella organisations, and on non-profit making sports clubs to their members. In their case, the charge they make for affiliation fees will continue to be exempt under the law. If they are partly exempt for the purposes of calculating their recoverable input tax, such bodies should ensure that they continue to include affiliation fees in their exempt and total supplies in any appropriate partial exemption calculation.

Share on FacebookTweet about this on TwitterShare on LinkedInShare on Google+
  • Latest news and testimonials

  • Latest News

  • Testimonials

    • Partner – Solicitor

      I have worked with SBL over the last 10 years on numerous matters involving owner-managed business. They are professional, personable, knowledgeable and work incredibly hard to provide the best advice to their clients. I would have no hesitation in recommending SBL.

      Read more
    • Director – Networking Company

      SBL are a professional Accountancy Firm and are exceptionally up to date with all legislations.  SBL know their clients extremely well and what will work best for their business. SBL understands business and how business works and they deliver the very best considered professional advice.

      Read more
    • Director – Retail/Fashion Company

      SBL have provided auditing and other accounting services for our company for more than 10 years. They not only offered excellent support from a professional accountant company, but also delivered forward-thinking advice on how to improve our business.