VAT and leisure facilities
A new Revenue & Customs Brief (13/09) has been published which is relevant to businesses such as community leisure centres that are run by non-profit making trusts. The updated notice (which replaces brief 50/07) has been written following a recent Court of Appeal case that looked at the VAT liability of certain supplies from the eyes of the consumer rather that the supplier.
HMRC’s new 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 are are made from 1 April 2009. HMRC have also confirmed that they will accept backdated claims from businesses that 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).
This represents an important opportunity for relevant businesses to make backdated VAT claims.