A landmark tax case, that could allow private members' golf clubs to recover thousands of pounds-worth of VAT paid on green fees, has been sent to the European Court of Justice (ECJ).
A tribunal has ruled that the legal definition of a key phrase used in the proceedings needs guidance from the ECJ, which will not hear the case until the summer of 2013.
Last year, the First Tier Tax Tribunal ruled that green fees at Bridport & West Dorset Golf Club, which had previously been subject to VAT, should be exempt, as they did not represent 'additional income' for the club.
This was set to mean that every private members' golf club could claim for a VAT refund going back four years, with some commentators believing that the recovery could go back until 1990, generating, in total, more than £300 million for some British golf clubs.
However, HM Revenue & Customs (HMRC) appealed against the decision, and the Upper Tier Tribunal has now heard that appeal.
HMRC told the tribunal judge, Mrs Justice Proudman, that the purpose of green fees is to generate 'additional income' and the restriction of the exemption to membership fees is therefore required under European Union law.