Global Edition

Slash VAT Rates to Encourage Golf Participation

1.22am 18th March 2011 - Management Topics - This story was updated on Monday, June 27th, 2011

Colin Mayes, CEO of Burhill Golf and Leisure and Chairman of the UK Golf Course Owners Association.

The Burhill Golf and Leisure CEO is urging the Government to slash VAT rates for Golf Clubs. Colin Mayes strongly believes Whitehall should follow the lead taken by many other European countries (such as Sweden and Holland) of dropping the rate from its current 20% to around 6% – allowing sports facility owners to offer lower prices and so, potentially, attract more customers.

Ideally, Mr. Mayes would like to see the VAT rate for proprietary-run sports organisations removed on activity-based income – a benefit currently enjoyed only by private members (non-profit making) clubs.

Burhill Golf and Leisure – the UK’s leading golf course owner and operator with 10 facilities – has been forced to further raise its prices, including annual subscriptions, green fees and clubhouse provisions, following the 2.5% hike in the VAT rate introduced on January 1.

“The government should, without question, reconsider its position regarding the VAT it levies on all sports clubs,” declared Mr. Mayes.

He added: “We, in conjunction with the government, should be encouraging all the family to take part in healthy lifestyle pursuits such as golf – not putting them off with unreasonably high, VAT-influenced, prices.

“Quite simply, the unnecessary rise to 20% is a huge burden for the sports industry.”

Golf is ‘unnecessarily expensive’

The government, insisted Mr. Mayes, appears to be sending out mixed messages over the issue. “On the one hand it says it wants to avoid the UK becoming an unhealthy, obese country and encourage people to play sport – yet, on the other hand, it makes it unnecessarily expensive to play sports like golf at courses such as those in the Burhill group.

“The rise in VAT is becoming a huge burden for commercial organisations, such as Burhill Golf and Leisure, that are being forced to pass on the rise in costs to our customers. And we do not want golf to be seen as the expensive pastime that, unfortunately, it may soon become.”

Mr. Mayes also highlighted the vital role sports organisations can play in helping to boost the flagging UK economy.

“Revenue from sports activities, and sport-related tourism drawing visitors keen to play some of the world’s finest golf courses, can play a key role in achieving this – but not given the present situation,” he said. “You would hope the government would realise this. It’s very skewed thinking.”

Inequality among golf facilities

One issue that has caused much debate is the inequality among golf facilities regarding VAT – private members clubs are exempt from paying the levy while proprietary facilities are not. It’s a matter that influential golf industry body the UK Golf Course Owners Association (UKGCOA), of which Mr Mayes is Chairman, has also made comment on.

“Commercial organisations such as Burhill Golf and Leisure already pay corporation tax which private-member golf clubs do not – and this should be sufficient. But we are all sports facilities and use various income streams to maintain and improve our facilities for our customers’ benefit. Clearly the commercial clubs are losing out quite considerably.

“We have called on the government to remove this inequality, as we believe there is ultimately no difference between private-member and commercial facilities, but the status quo continues.”

A spokesman for HM Revenue & Customs has said there is insufficient evidence to justify a ‘one rule for all’ policy for golf clubs: “Whilst EU legislation would allow us to withdraw the exemption if we considered that it resulted in distortion of competition, we have never received convincing evidence that this is the case.”

One compromise, suggested Mr. Mayes, would be to maintain the current VAT level on clubhouse purchases (non-activity-related) but reduce it for green fees and annual subscriptions (activity-driven).  “The government would still claw back some tax on food and drink but demonstrate its desire to encourage people to play sport by waiving it on these particular activities.”

Burhill Golf and Leisure Ltd

UK Golf Course Owners Association

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