Direct attribution to taxable supplies


A First-Tier Tribunal decision in a case involving Queens Club (QC), the tennis club that hosts the pre Wimbledon tennis tournament.

QC incurred input tax on the design and refurbishment of its bars and cafe, to create a more attractive offering for use by its members and members’ guests. The dispute concerned whether this input tax was fully recoverable or whether, as HMRC argued, it was partly referable to the exempt sporting activities.

These were the key findings which assisted the judge in finding for QC:

  1. There was no contractual obligation to provide members with the facilities;
  2. Most members do not use them;
  3. The judge distinguished similar decisions involving sporting clubs with more modest facilities on the grounds that the member would necessarily acquire a right of access to a single clubhouse. In this case, the bar and restaurant occupied one part of one of the four buildings available to members;
  4. HMRC failed to show that people joined the club or sought to renew their membership as a direct result of the refurbishment of the social space.

A case that is very influenced by the nature of Queens Club, compared to more traditional members sporting clubs.

Nevertheless, will be useful (or not) in other cases involving input tax recovery.

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