VAT – leisure trusts
HMRC have published ‘VAT: leisure trusts providing all inclusive membership schemes’ for businesses such as community leisure centres that are run by non-profit making trusts.
This is an updated notice (which replaces Revenue & Customs Brief’s 50/07 and 13/09) and has been published following a Court of Appeal case that looked at the VAT liability of certain supplies from the eyes of the consumer rather those of the supplier.
HMRC’s revised approach will mean that the majority of supplies made by community leisure centres are VAT exempt. For example, an all-inclusive monthly package which allows the purchaser access to a range of facilities at the leisure centre will usually be treated as VAT exempt.
Businesses should ensure that any necessary changes in VAT liability have been made with effect from 1 April 2009. HMRC have also confirmed that they will accept backdated claims from businesses, subject to the usual time limits, that they have accounted for output tax incorrectly. The claims must take into account any over-claimed input tax which may also have been claimed in error (as the supply is now being treated as VAT exempt).
The new guidance also includes information on the effect of the change on the Capital Goods Scheme.