Scottish rugby club triumphs in VAT story
Rugby club awarded zero-rating for construction of new clubhouse

Clubs in the past have tried to claim that their new clubhouse would act as a "village hall or similar", hoping that this would allow them to have the construction costs zero-rated, which means they don't have to pay the VAT. Some clubs have been caught out by this and been made to pay back the VAT, which could be thousands of pounds.

This year, HMRC appealed against a court ruling allowing a Scottish Rugby Club's clubhouse construction to be zero-rated. Read the story below or watch our animation to find out why the court ruled in favour of the club.


  • In 2016, a court case ruled in favour of a Scottish Rugby Club, following an appeal from HMRC about whether the club’s new clubhouse met the criteria to be zero rated.
  • The club was a charitable members’ club and not registered for VAT, and relied on the new clubhouse being accepted as a ‘village hall or similar’, in order to meet the criteria for zero rating.
  • HMRC accepted that the clubhouse was frequently used by the local community, but argued that the clubhouse should be under control of the local community, even indirectly (e.g. by the local community electing representatives into the managing body), for it to be treated as a village hall.
  • The clubhouse was used extensively (85%) by people from the local community, including a dance school, choir meeting, multiple sclerosis society meeting, band practice, an athletics club, external fundraising events and more. It was rented out at reasonable rates to encourage use by the wider community. If there was a clash between a rugby fixture and an event that was already booked, the rugby game did not take precedence, for example match start times had previously been changed to accommodate other use of the site.
  • It was decided that although community control over the building is a factor that could be taken into account, in this case, the evidence of the actual use of the site was more significant. It was deemed that the clubhouse was used in a similar fashion to a village hall.
  • HMRC’s appeal was dismissed and the full ruling can be accessed here.


This story shows the importance of understanding your club's tax implications. For more information, and to access our VAT guidance, visit our Tax and Sports Clubs page.

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