'Raise VAT' call leads to angry backlash - Golf Club Management

Proprietary golf clubs have been angrily derided as ?soulless? in reaction to a call by the chief executive of Burhill Golf and Leisure for VAT to be increased on membership subscriptions at private members? clubs and reduced at profit-making ones.

On Wednesday?the UK Golf Course Owners Association (UKGCOA) released a statement from its chairman, Burhill?s Colin Mayes, to the golf industry, in which he said that the levy should be reduced from 20 per cent to five per cent at?proprietary clubs, and increased from zero to five at?private members? clubs, which do not make a profit for their owners.

However, this has led to an angry backlash from those involved in private clubs, with one person even saying he hopes that several proprietary clubs close down.

Mr Mayes, CEO of Burhill Golf and Leisure, which runs 11 proprietary golf venues and was named by PricewaterhouseCoopers in 2010 as one of the UK?s top 100 companies with the fastest-growing profits, said:??Over the past few months, there has been significant debate and activity relating to the issue of tax inequality in golf.

?Both private members? golf clubs and proprietary golf clubs offer sport and recreation, yet are treated differently ? and, in our view, unfairly ? by HMRC.

?The UKGCOA is seeking an outcome that is fair and equitable, not just for the UK?s golf course proprietors, but golf and participation sports as a whole.

?And that?s why we seek a level playing field for all and to align ourselves with both England Golf and the Sports and Recreation Alliance by proposing a five per cent VAT rate for all sports clubs.?

Brian Inglis, a former secretary at a private members? golf club, responded: ?To suggest the reintroduction of any level of VAT on regular golf club membership is ludicrous and in my view this loses the UKGCOA some credibility as a body with the interests of our great game at heart.

?Proprietary clubs aren?t running golf facilities for the good of the public?s health and wellbeing, and now that the lean years have set in it?s becoming tiresome to hear the same drum being beaten over and over as it becomes harder to satisfy shareholders.

?I?ve never been one for frequenting the proprietary-type facilities, and with a few high quality and obvious exceptions, I?ve found them to be pretty soulless places from a golfing perspective, with the ?golf? part of it feeling kind of incidental to the main commercial activity going on. You?re more of a season ticket holder than a member.?

A separate industry insider, who said that while he does know of successful and profitable proprietary clubs, and unsuccessful private ones, nonetheless even stated that he hoped that some proprietary clubs will close down.

The man, who works for several companies that supply products to both private members? and proprietary golf clubs, said: ?Too many ? largely proprietary ? golf?clubs were built in the gold rush after The R&A stated in the early 1990s that proprietors could make money by building new venues. Around 50 per cent of clubs are now losing members and money. If those new clubs hadn?t been built then the existing clubs would still have waiting lists.

?If only 50 per cent of those clubs had been built I think we?d see something much closer to equilibrium.

?If there were less proprietary clubs, and that?s what market forces suggest is needed, and if dare say it, they deserved to fade away, go under the plough, whatever, what?s the problem?

?And if the current rate of 20 per cent VAT helps them go there, that would be a good thing, wouldn?t it??

Mr Mayes also stated that the results of this month?s Chipping Sodbury case are not likely to be known for many months. He said it will take two to three months to find out the tribunal?s decision and, as the losing side is likely to appeal, a further 12 months until that is resolved. He added that the decision will probably affect all sports? clubs, and not just golf clubs, and praised England Golf for the work it has done on trying to achieve a fair tax regime for all golf clubs.

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This article was published on Friday, May 25th, 2012 at 8:39 am You can skip to the end and leave a response.

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