Exempt ― sport and physical recreation

By Tolley

The following Value Added Tax guidance note by Tolley provides comprehensive and up to date tax information covering:

  • Exempt ― sport and physical recreation
  • What does the VAT exemption include?
  • What is an eligible body?
  • Commercial influence
  • Exempt sporting activities
  • Exempt sports and physical recreation
  • Services closely linked and essential to sport or physical recreation
  • Individuals
  • VAT liability of sporting services
  • Sports governing bodies
  • Fines
  • Entry fees
  • VAT recovery on costs

This guidance note provides an overview of the main VAT rules relating to supplies of sport and physical recreation.

VATA 1994, Sch 9, Part II, Group 10; VSPORT1000; VAT Notice 701/45: sport 
What does the VAT exemption include?

The VAT exemption covers:

  • the provision of sport and physical recreation by an eligible body
  • entry to eligible sport and physical recreation competitions
What is an eligible body?

An eligible body is an organisation that meets all of the following criteria:

  • it is a non-profit making organisation
  • the organisation’s constitution includes a non-distribution clause or limits the distribution of any profits / reserves to:
    • another non-profit making club
    • its members if the organisation is either wound up or dissolved
  • the organisation uses all profits / surpluses from its playing activities to maintain or improve the related facilities or for the overall activities of the non-profit making organisation
  • the organisation is not subject to any commercial influences or part of a wider commercial organisation (see the Exempt ― sport and physical recreation ― commercial influence guidance note)

VSPORT2010, VSPORT1030; Value Added Tax (Sport, Sports Competitions and Physical Education) Order 1999, SI 1999/1994 (subscription sensitive)

When is an organisation non-profit making?

The constitution should outline the main purpose of the organisation and whether the organisation has the ability to distribute profits or surplus income. The organisation should have a non-distribution clause in its constitution. There is no prescribed format for one

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