Community Game Update: April 2017.
Subscription income - VAT treatment
Membership subscription payments received from playing members of a not for profit club are exempt from VAT under the VAT sporting exemption. All other non-playing 'social' subscriptions received, such as vice presidents, are liable to VAT at 20 per cent.
Although this is the 'default' position applied correctly by most clubs there are opportunities to vary this treatment that potentially create a VAT advantage.
For example, where a club playing kit displays a sponsor’s name or logo which has been paid for by a sponsor and VAT declared on that income, the club can treat the VAT incurred on the purchase of the kit as a non-attributable cost and at least recover the taxable proportion calculated under its partial exemption calculation.
Alternatively, if the club removed the benefit of the 'free' kit from being an advantage of paying the subscription, and sold the kit directly to the player, VAT would need to be declared on the income. However, this would give the club the entitlement to fully recover the VAT it has incurred on purchasing the kit from its supplier. This will only be an advantage where the club has exceeded the de minimis limits in any given year and cannot recover the VAT on the kit.
Another possibility is for the club to apportion the subscription income to reflect the different VAT liabilities of the facilities and advantages supplied to members. The opportunity to apportion a membership subscription only arises for not for profit clubs and is only available by a specific ' extra statutory' concession applied by HMRC.
The RFU has engaged the services of Russell Moore, a former partner at leading sports advisory accountants Saffery Champness, to provide a VAT helpline service to clubs. The first 30 minutes of advice is free to clubs with any additional services provided at greatly reduced rates.
Clubs can contact the helpline on 07710 329317 or email rugbyvat@saffery.com.
Business Rates
In the March budget the government pledged support for businesses affected by the business rate re-valuation by providing £300m for local authorities to provide discretionary relief in the hardest hit cases.
Local authorities will be able to provide discretionary rate relief over the next four years to help businesses most affected by the revaluation. Each billing authority in England will be provided with a share of the £300 million to support their local businesses. Government believes that local authorities are best placed to judge the particular circumstances of local ratepayers and direct the funding where it is most needed to support local economies.
Local authorities will design their discretionary relief schemes and determine the eligibility of ratepayers for support. Therefore, please check your Local Authority discretionary rate relief schemes to see if your club is able to take advantage of the reliefs on offer.
Please click HERE for the RFU briefing note on the 2017 rating revaluation for information.
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