Bedale Golf Club appealed against HMRCs decision that input tax incurred on clubhouse maintenance and repair costs was not fully recoverable as they related to the VAT exempt supply of sport or physical recreation and not solely the provision of food and drink which is a taxable supply for VAT purposes. HMRC highlighted that the costs specifically related to the refurbishment of the lift providing access to the clubhouse as well as the refurbishment of chairs and the purchase of new curtains for the lounge area of the clubhouse. It was argued that the lift, chairs and curtains did not relate solely to the provision of food and drink and that even though they did relate to the golf club making taxable supplies, it did not prevent the costs from also relating to exempt supplies. HMRC's original decision to classify this input tax as residual, therefore restricting the golf club's ability for recovery, was upheld. The classification of input VAT for partial exemption calculations is not always as straightforward as it may seem so to avoid potential errors and potential assessments, seek advice through our free helpline.
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