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The VAT liability of sports clubs has proved a long and complex issue. In April 1994 the rules determining the VAT treatment of non-profit-making clubs were amended, following complaints by sports clubs and the European Commission that UK law was incompatible with European VAT legislation. Subsequently in March 1998 Budget, a draft Order was laid to amend these provisions, to prevent the practice of some commercial sports clubs seeking to enjoy the same VAT exemption granted to non-profit-making clubs. This was widely criticised for affecting the VAT position of a number of genuine non-profit-making clubs, and it was allowed to lapse. A revised draft was published in January 1999, with the intention that the Order would take effect from 1 April 1999. Following discussions with interested parties, HM Customs & Excise made further changes before the Order was laid on 20 July 1999. This legislation was debated on 26 October 1999 and finally came into force on 1 January 2000. Following these changes there has been a lot of debate as to how the new rules affect golf clubs – in particular, proprietary – or private profit-making clubs – who have argued that the VAT exemption which non-profit-making members-only clubs may claim is discriminatory.


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