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UK Conservative Clubs face VAT bill

  • VAT
  • 08 April 2016 | Richard Asquith

UK Conservative Clubs face VAT bill

UK Conservative Clubs (Club), associated with the UK Conservative Party, have lost a key test VAT case that could see them facing a tax bill running into hundreds of thousands of pounds.

The UK’s First Tier Tribunal (FTT) court has ruled that the Clubs do not have ‘political aims’ that entitle them to a VAT exemption under the EU VAT Directive.

Conservative Clubs exempt from VAT?

The case centred on whether the Clubs have political aims, and are therefore exempt from charging UK VAT at 20% on members’ subscription fees. In a test case, HMRC ruled that the Shanklin Conservative Club was not providing political services to its members, and so should have been charging VAT on annual membership subscriptions. Its services included a restaurant, two bars and a hall for hire.

The Shanklin Club contested this on the basis that it was a not-for-profit organisation, and promoted the principles of Conservatism. Whilst its members were not required to be Conservative Party members, they were obliged to confirm that they supported the Conservative Party on their joining application. The Shanklin Club (like all Conservative Clubs) runs a political committee, open to all members, which co-ordinates political activities in the area and hosts the local MPs surgeries.

FTT rules VAT due

The First Tier Tribunal tax court however found that the principle services provided by the Club was sporting and leisure related – even though it was an opportunity to socialize with people with similar political aims.   This included events held to raise funds for the Conservative Party.

On this basis, the FTT ruled that the Shanklin Club should have charged 20% UK VAT on membership subscriptions. In this case, Shanklin Club owed £16,985.


VP Global Indirect Tax
Richard Asquith
VP Global Indirect Tax Richard Asquith
Richard Asquith is VP Global Indirect Tax at Avalara, helping businesses understand their compliance obligations as they grow globally. He is part of the European leadership team which this year won International Tax Review's Tax Technology Firm of the Year. Richard qualified as an accountant with KPMG in the UK, and went on to work in Hungary, Russia and France with EY.