Biker club wins VAT case

Many clubs offer members a range of services for their membership fee. For example, membership may include a members’ magazine. Ordinarily, a magazine subscription should be zero rated for VAT purposes, but when the magazine element is bundled into a general club subscription – that is standard rated for VAT – problems can arise.

HMRC is prone to view the “bundled” price as a standard rated supply, whereas the affected organisation would prefer to separate out the zero-rated element thus reducing the cost to their members.

In a recent case, the Harley Owners Group challenged such a fixed supply argument raised by HMRC. They argued that the members’ magazine was a separate supply and should be considered zero-rated, and the courts agreed.

The delivery of mixed services under an umbrella membership subscription is an area of VAT law that is far from clear. However, HMRC has lost a number of cases recently with a similar outcome to the Harley Owners Club.

Latest Blog
19
May

Flexible planning

If we lived in a world where the factors that affected trade and other commercial act...

Read More
17
May

New Bill protects consumers access to cash

The new Financial Services and Markets Bill, announced during the recent Queen’...

Read More
12
May

Saving for a rainy day

The more draconian government interventions introduced to control the COVID outbreak ...

Read More
11
May

Elastic or inelastic?

Would demand for the products or services you sell vary with price increases or decre...

Read More