Question:
My question is on behalf of Ashridge Park, a grassroots football club that hires facilities at Montague Park and Cantley Park. Prior to March 2023 Wokingham Borough Council (WBC) charged VAT on all Sports Pitch bookings, but an exemption (VATLP19200) on bookings in blocks of 10 or more meant that we did not pay (and WBC did not collect) VAT on most bookings. In March 2023 HMRC ruled that bookings were not liable for VAT. WBC has continued to charge users at the VAT-inclusive rate, keeping the benefit of the tax cut for themselves. However, because the exemption that we used to take advantage of now longer applies, we are paying thousands more (20%) than last year for the same facilities. The Service Level Agreement (SLA) for Cantley that both parties signed in 2021 caps annual price rises at 3% until 2026. We first queried this with WBC in June 2023 and have yet to receive a substantive response.
I would like to ask the Executive Member if they accept that by retaining the VAT savings for themselves, and greatly increasing the costs that the club is paying, the Council is in breach of the SLA and what their plans are to remediate this?
Minutes:
My question is on behalf of Ashridge Park, a grassroots football club that hires facilities at Montague Park and Cantley Park. Prior to March 2023 WBC charged VAT on all Sports Pitch bookings, but an exemption (VATLP19200) on bookings in blocks of 10 or more meant that we did not pay (and WBC did not collect) VAT on most bookings. In March 2023 HMRC ruled that bookings were not liable for VAT. WBC has continued to charge users at the VAT-inclusive rate, keeping the benefit of the tax cut for themselves. However, because the exemption that we used to take advantage of now longer applies, we are paying thousands more (20%) than last year for the same facilities. The SLA for Cantley that both parties signed in 2021 caps annual price rises at 3% until 2026. We first queried this with WBC in June 2023 and have yet to receive a substantive response.
I would like to ask the Executive Member if they accept that by retaining the VAT savings for themselves, and greatly increasing the costs that the club is paying, the Council is in breach of the SLA and what their plans are to remediate this?
Answer
As you correctly suggest, in March 2023 the HMRC made a public statement agreeing to change their stance in respect to charging VAT on sports pitch bookings. Despite this statement, we were aware that a further review was being undertaken and that further guidance would be issued once that was complete.
At the time when this was highlighted, Wokingham Borough Council took external advice on the position, and we were advised to hold off from making any changes to our VAT requirement on sports pitches until the full and longer term position was clarified.
Sadly, our experience shows that sometimes government bodies issue statements on policies that are not ready to be implemented yet and things often change before we are actually get to see the details and are required to act on them.
The good news is, that sports pitches have now appeared in HMRC advice very late in 2023, and we are currently working through all of the detailed changes required in order to align how our fees are classified for VAT purposes.
I can assure you and Ashridge Park FC, that the Council has at no point increased its own element of the fees that are being charged - and that the VAT part of our fees was only ever expected to be passed on to HMRC. Now that we finally have the full and confirmed understanding, we are working to review how much VAT has been paid to HMRC and we will recover any overcharge payments. These overpayments claimed will be used to repay any organisations that were overcharged. We are working to do this as quickly as possible and will be in touch with all organisations affected in due course, so it is good news.
Supplementary Question:
Would you care to put more detail as to what ‘in due course’ actually means please, are we talking weeks, months?
Supplementary Answer:
Sadly, I cannot as we are dependent on what HMRC does and what they will allow us to do. I did ask the question as well when it came through, but unfortunately, we cannot put a date on it, but it will be in a reasonable time, I hope.