GOVERNMENT AVOIDS OWN-GOAL WITH SPORTS CLUB VAT REVERSAL - STUNELL

12.17.00pm GMT Wed 3rd Dec 2008

Sports clubs across Greater Manchester are celebrating a hard-fought victory today, after the government bowed to opposition, and shelved plans to impose VAT on sports and leisure clubs membership packages. A cross-party group of MPs, led by Lib Dems Danny Alexander, and Hazel Grove MP Andrew Stunell, had put pressure on the government to reverse the decision, which could have driven hundreds of clubs to the wall.

The government's plan to allow Her Majesty's Revenue and Customs (HMRC) to impose VAT on sports and leisure clubs membership packages, and collect the tax retrospectively would have seen some clubs facing bills of several million pounds, driving many out of business.

After pressure, from MPs, local campaigners, and sporta, the representative body for sports and leisure enterprises, the government has now reversed its position. In a letter to sporta Chair, Craig McAteer, HMRC outlined the government's decision, confirming that, after taking legal advice, leisure trusts will be entitled to VAT exemption on all-inclusive membership cards. Trusts will also be able to reclaim VAT paid in the last three years, in instances where it has already been paid on leisure facilities that are exempt.

Commenting on the hard-fought victory, Andrew said:

"This is great news, and a deserved victory for everybody involved in opposing the government's plans.

"The leisure industry had been hit for six by the original proposals from HMRC. The credit crunch is already hitting local businesses hard, and these proposed VAT rises would have driven countless sports clubs and leisure facilities across the region out of business.

"After taking legal advice, the government soon realised they were on the back foot on this issue, and their u-turn has narrowly avoided what would have been a massive own-goal. Thankfully, we've achieved the right result in the end."

ENDS