HMRC rejected a claim made by Shanklin Conservative and Unionist Club for the repayment of overpaid output tax which was submitted by the Appellant to recover VAT charged on membership fees that they believed qualified for exemption from VAT under Schedule 9, Group 9 due to the Club being a non-profit making body with aims of a political nature. The Club appealed this decision and the appeal was heard by the First-Tier Tribunal. The aim of the club, which was registered for VAT, was to â€œpromote by all proper means the principles of Conservatism, and the implementation of the Conservative Party's policiesâ€. In order to qualify as a member of the club, an applicant had to be nominated by an existing club member and must confirm that they are a â€œConservative in politicsâ€. Members received a programme of activities 3 times a year, access to live entertainment several night a week aswell as access to a low-price bar on the Club's premises, sports facilities and literature provided by the Association of Conservative Clubs. HMRC rejected the initial claim on the grounds that the main focus of the Club was deemed to be the provision of leisure activities, including organised bridge, cribbage and skittles games undertaken on the Club's premises. HMRC had previously granted exemption of 30- of the Club's subscription income due to the provision of optional political facilities, although this was not seen to be the main supply made by the Club, however, the Appellant was appealing to treat the entirety of the Club's membership income as exempt from VAT. It was also stated during the case that not only did the Club's main aim have to be political to qualify for exemption but the services supplied by the Club in return for membership subscription had to be mainly referable to the Club's political aims. Due to the emphasis of the Club's activities being the social aspect, coupled with the political activities of the Club being optional, the appeal was dismissed and full exemption was not granted. If you require clarification with regards to the correct VAT treatment of activities undertaken by a club or association, please call our free VAT helpline today for expert advice.
Watch Our Videos
Get the vital information you need quickly and easily by watching one of our guidance videos - topics include VAT assessments and penalties, VAT for charities, and maximising VAT recovery.