Sports clubs beware! Having found the first morsel not to its taste, Customs is now set to take a second bite.
The issue? The VAT treatment of VAT-registered sports clubs.
Many sports clubs are amateur organisations run by committees without the assistance of professional staff. Following a change to VAT law in 1994, designed to bring the UK into line with the rest of the EU, payments by members to participate in sport have been exempt from VAT.
Customs announced a change to the VAT law early in 1998. But this measure, which sought to deny exemption to sports clubs, was not effective. Now the department is taking another stab. It aims to achieve this by introducing new conditions defining "non-profit making".
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