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Councils can opt to claim exemption on sports services to public.
HMRC has explained how it will treat claims for VAT refunds by local authorities after the Court of Justice of the EU judgment in London Borough of Ealing (Case C-633/15).
Councils will be able to opt to claim for exemption on the sporting services that they supply to the public under the European VAT directive. As a result, related VAT on inputs will be restricted when it is not treated as insignificant under paragraph 8.2 of VAT Notice 749: local authorities and similar bodies.
Alternatively, they can tax those supplies on the basis of UK law so that VAT on inputs will continue to be recoverable when it relates to taxable supplies.
Details can be found in Revenue and Customs Brief 6/2017: VAT – treatment of sports facilities by local councils.
