Spring Statement and MTD for golf clubs

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Amidst all the Brexit debates the Chancellor Philip Hammond presented his second Spring Statement on 13th March. These days the Spring Statement is just an update on how the UK economy is going compared to the Budget set in the Autumn,  but it is a useful reminder of the changes announced then which come into effect from April.

The personal allowance rises to £12,500 and the basic rate tax band to £37,500 so that the threshold at which higher rates of tax applies is now £50,000 if you are entitled to the full personal allowance.

For clubs entitled to claim gift aid there are some changes to the rules regarding donor benefits i.e the amount of benefit a donor can receive in return for his donation. From that date the threshold is 25% of amounts up to £100 and then an additional 5% of the donation over £100. The maximum total benefit a donor can receive is £2,500.

Corporate tax rates remain the same at 19% but there are additional capital allowance limits. For qualifying capital expenditure between 1st January 2019 and 31st December 2020 the annual limit available for immediate relief is raised to £1M. In addition there is a new structures and buildings capital allowance of 2% per annum. This is available for new buildings and also for the improvements of existing structure including the cost of converting and renovating to bring into commercial use so will apply to most golf clubs. This applies to costs incurred on or after 29th October 2018 provided the contract is not dated before this.

Virtually all golf clubs are partially exempt for VAT purposes and the government has indicated it will be looking at ways of simplifying the rules so keep an eye out for announcements later in the year

Making Tax Digital comes into effect from 1st April 2019 as has been widely trailed in the media however it actually only applies for VAT accounting period commencing on or after that date so if you normally complete return up to march then this date applies but if your quarter does not end till 31st May then the first return under the new system will the one to Augusts 2019. Many golf clubs who are either unincorporated or who have a group structure will have been notified that their first returns will the periods commencing on 1st October or in the two months thereafter. If you have not been notified of a delay then the original dates apply.

For most golf clubs who use SAGE or XERO or Quickbooks the good news is that the software is MTD compliant provided you have updated to the latest Cloud version. If you have not already done so then now is the time to get this done. If you use spreadsheets to do your partial exemption adjustments then at least for the first year you just need to ensure you process these adjustments into the accounting software for the quarter before filing the return.  For others who use Spreadsheets and then use these to file their returns you will need to purchase some bridging software that will file the return from your files.

This sort of software is available from various sources and if you would like further information on this please contact us as we have a solution to your requirements.

The good news is that HMRC have announced that they will not be extending MTD to other taxes until at least 2021. Other than the above not much for clubs to be concerned about at least from a taxation standpoint.

Do you need extra information?

Robert Twydle - Consultant at Hillier Hopkins

Robert has been our VAT and golf clubs specialist for the last 28 years and has a wealth of experience and knowledge.

Contact Robert at robert.twydle@hhllp.co.uk or on +44 (0)1923 634410