Reply To: VAT on the supply of land and sporting facilities — Exempt or standard

Forum Categories VAT ON PROPERTY TRANSACTIONS VAT on the supply of land and sporting facilities — Exempt or standard Reply To: VAT on the supply of land and sporting facilities — Exempt or standard



The letting of sports facilities is normally standard-rated (Item 1(m), Group 1, Sch 9, VATA 1994).

There are circumstances where the letting of sports facilities can be exempt:

(i) here are special rules for the use of sports facilities where there are lets in excess of 24 hours or for the hire of facilities to the same user for a regular series of events (discussed in more detail below). The supply of sporting facilities becomes eligible for exemption in both these cases. However, the facilities can still be opted in to tax by waiving the exemption. You can see the ’24 hour rule’ on para 16, Group 1, Sch 9, VATA 1994. Also read VAT Notice 701/45.

(ii) If the sporting facilities are let for non-sporting purposes then the supply will be exempt. An example of this will be the letting of a swimming pool for a fashion shoot.

Take a look at an interesting case below:

Pritchard t/a Dance at 8 [2003] BVC 4,090 taught ballroom dancing from a room which they rented twice a week for up to three hours. At other times, the room was hired to other organisations. No VAT was charged in respect of room hire for keep fit classes and for movement to music, but VAT was charged to Pritchard.

The tribunal decided that to be within item 1(m), the room must be suitable for the use for which it was let and must be intended to be let for that purpose. The room was not ideal for teaching dance, especially as it had a concrete floor covered with fibreboard, but it provided a suitable facility for the teaching of ballroom dancing for which purpose it was intended to be used and was used. The supply was, therefore, excluded from exemption by item 1(m). The supply was not brought back within the exemption by Note (16), as the dance school was not a ‘school’ within Note (16). Although there is no definition of the word school for VAT purposes, the dictionary definitions centre on the young age of the pupils. Whilst the appellants may have taught young persons, there were no restrictions on age. Thus, the supply of room hire to Pritchard was standard-rated.