IMPORTANT VAT UPDATE - Treatment of Sports Facilities

VAT on sporting fees - HMRC concede that charges for council sports facilities are non-business.

HMRC's existing guidance is that local authority sports and leisure services can either be taxable or exempt from VAT. This has been challenged in the courts, with test cases for England, Scotland and Northern Ireland going on for several years.

On 26 January 2023, HMRC advised that they will NOT be pursuing the 'significant distortion of competition' argument and accept that local authority sports services can be treated as non-business and outside the scope of VAT.

This is a MAJOR change to previous rules for parish and town councils, and all councils with, or considering, such facilities should read the briefing below.