New VAT Rules for Council-Run Sports Services

Big news, folks! In the very near future, every sports facility booking could generate an additional 20% revenue for your council. Alternatively, you could choose to reduce your current booking fees and pass on the 20% savings to your community facility hirers. Here is why:

From the 1st of April 2023 the VAT rules for council-run sporting facilities and fees in the UK are set to change. Local authority sports services will soon be treated as non-business and won’t be required to pay VAT. While we wait for further guidance from HMRC, let’s take a moment to consider what this could mean for councils and what you can do to plan for the change.

Things to consider:

1. Whether you will stop charging 20% VAT on new ad-hoc bookings

a. When you will stop charging 20% VAT

2. How you would like to amend existing bookings that have been placed with 20% VAT but taking place in the future

a. Any future pricing changes for this year (or next) and any potential discounts for block bookings

3. If you want to claim a refund from HMRC for the VAT declared in the last 4 years

a. If yes, you can get a report from Bookteq for bookings that were charged 20% VAT but may be eligible for a claim,

b. You need to decide whether those customers from the bookings are due a refund

4. If you haven’t registered for VAT yet and skipped out on getting back VAT for sports facilities because you thought they weren’t taxable, go ahead and get that money back! You can claim back any VAT you paid on sports facilities for the past 4 years.

5. For future pricing, will your council keep the total fee for a given booking the same now if the 20% VAT is not a requirement anymore? i.e will you reduce current booking fees by 20%, passing the savings to the customer, or will you keep the fees the same and keep the additional revenue for the council?

In conclusion, the changes to the VAT rules for council-run sports facilities in the UK present an opportunity for local authorities to increase revenue or pass on savings to their community facility hirers. By treating sports services as non-business and won’t be required to pay VAT, councils can choose to stop charging 20% VAT on new bookings, amend existing bookings that were charged 20% VAT, claim a refund from HMRC for VAT declared in the last 4 years, and consider future pricing strategies that could benefit both the council and its community. It’s essential for councils to plan and make informed decisions to maximize the benefits of this VAT rule change. With careful consideration and planning, councils can take advantage of this opportunity to create a win-win situation for both their revenue and their community.

It’s important to note that this information is only a guide, and councils should take the necessary steps to ensure they are following the appropriate regulations and guidance provided on the official government website, By staying up to date with the latest information and seeking expert advice when necessary, councils can ensure they are making informed decisions and taking appropriate action.

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