Update of the Year’s Events
The update of the year’s events has become a regular and popular feature of the December edition of the Conservative’s Clubs Magazine.
The article provides an opportunity to re-visit the most important changes that have affected Clubs during the past twelve months. It is important for Club Officers and in particular Secretaries and Treasurers to be made aware and kept up to date with current legislation which can have a dramatic effect on the effective management and administration of Private Members’ Clubs.
The most significant events this year have been the ruling by the European Court of Justice (ECJ) concerning the Premier League Murphy Case, the removal of category B3A Automated Lottery Machines from VAT and Amusement Machine Licence Duty (AMLD), the repayment of some £2.5 million Linneweber claims first registered by Clubs in 2006 and the opportunity to claim further VAT refunds, the proposed ‘Night Time Levy’ and finally the proposed charge increases being suggested by PPL.
In my role as Secretary of the ACC, I continue to attach the greatest importance to visiting as many Clubs and attending as many meetings as possible during the course of each year. This can be a time consuming practice but without having an ongoing first hand understanding of the challenges being faced by Club Officers and Committees, it is not possible for the ACC to fulfil its primary object of supporting and advising Clubs. It is appropriate for me to add my thanks to all the ACC staff who together work as a team providing the support which our Member Clubs experience whenever they have the need to contact the ACC. Many Club Officers regularly speak to both myself and my Assistant Charles Littlewood but there are also a number of other staff members who work behind the scenes in maintaining our services.
As Chairman of the Committee of Registered Club Associations (CORCA), I continue to liaise and work with Club organisations covering a wide field of social and political interests. We all share one common goal, however, of helping and supporting Clubs which provide such a vital part of each of our local communities.
As a Party Treasurer and Chairman of the National Conservative Draws Society, I have been able to assist the Conservative Party with the finance that is necessary in order to support the Party’s vital campaigning activities. Unlike the opposition, we do not receive funding from Trade Unions. My thanks go to all those Club Members who participate in Party fundraising activities such as the Weekly Draw.
The Premier League/ Murphy Case
The European Court of Justice (ECJ) has ruled in the landmark Murphy case that restricting the sale of European foreign satellite decoder cards is “contrary to the freedom to provide services”.
The ECJ has stated that the only part of broadcasts involving sport, which can be subject to copyright are items such as on screen graphics, theme tunes, credits, highlights and commentary.
The ruling will now return to the High Court where a decision will be made on how the ECJ’s verdict is incorporated in UK legislation. Questions remain over what this ruling means for Clubs and until this case returns to the High Court the final outcome will not be known.
Technically, until this ruling has been considered by the High Court, UK legislation has not been altered and it remains unlawful for Clubs to use the services of European broadcasters. This ruling does not have any effect on broadcasters outside of the EU and Clubs will still be prosecuted for using television services which do not originate from the EU irrespective of what is ultimately decided by the High Court.
Whilst it is possible that the Premier League could continue to prosecute Clubs for using European Television Systems, we consider it is unlikely that any prosecutions will take place until the outcome of the High Court decision.
The Premier League has already announced that it considers that the ECJ ruling would prevent Clubs from broadcasting sport from foreign satellite systems, since it considers that the copyrighted aspects of the broadcast – credits, onscreen graphics etc. – still require authorisation in order to be broadcast to the public as referenced in the ECJ’s Judgement. A full article on this subject appeared in the November edition of the Magazine and further updates will be reported next year.
Linneweber 2 – A further VAT ‘Windfall’ Opportunity
There is a new opportunity to recover VAT on Ordinary Gaming the attention of Clubs the chance to reclaim previously paid VAT and the case became known as Linneweber. Clubs which followed the correct procedure obtained thousands of pounds in refunds from HMRC.
The current opportunity is not limited to the Clubs which previously claimed a refund of VAT. All Clubs are able to apply for this refund, irrespective of whether the Club applied for a refund under the original Linneweber case. As there is a four year cap on retrospective claims it is important that Clubs put in their claims as soon as possible.
Whilst there is no certainty of victory in this case, we are advising Clubs to put in a claim regardless. Whilst it is possible that HMRC will prevail in this case we believe that there is a strong chance of success for Clubs. If successful, any Club which has submitted a claim will be entitled to receive a repayment of the VAT previously paid on these machines from mid 2007 onwards.
The ACC has agreed a reduced fixed fee arrangement for ACC members with Ian Spencer & Associates Ltd for any clubs wishing to have Ian Spencer submit and manage their claims – please see the documents that were enclosed with the August edition of the Magazine for more details. If you do not have these enclosures, then please get in touch with the ACC. Due to the complexity of the case on this occasion we are advising Clubs not to submit their own documentation.
The Night Time Levy
The Police Reform and Social Responsibility Bill contains several proposed changes to the Licensing Act one of which is a proposed Night Time Levy. Effectively this would mean that establishments which open after 12 midnight will have to pay towards the costs of providing additional policing in the early hours of the morning. Also contained within the proposals is allowing the local authority to designate areas in which an Early Morning Alcohol Restriction Order can be placed which would force premises to cease the sale of alcohol between the hours of midnight and 6am.
The ACC has been lobbying on behalf of our Clubs to persuade Government that these proposals should not affect legitimate Private Members’ Clubs and should be targeted appropriately to the establishments which behave irresponsibly and contribute to the problem of excessive alcohol consumption.
We will continue to keep Clubs updated through the Magazine.
Default Retirement Age
The Default Retirement Age has been abolished and has no longer applied to businesses from the 30th September 2011.
Previously Clubs were able to write to employees, not more than twelve months but not less than six months prior to their 65th Birthday, informing them that they are approaching retirement. Employees were then allowed to request to work beyond this date.
If the Club does want to use a retirement age then this will have to be ‘objectively justifiable’ according to the needs of the Club. There are no longer statutory procedures for retirement in place.
Category B3A Machines
Category B3A Machines have been the subject of many articles in the magazine during recent years. Also known as automated lottery machines, these machines resemble a gaming machine but play as a lottery with top prizes of £500. Originally the machines were free of both VAT and AMLD. HMRC then took a different view following the introduction of the Gambling Act 2005 (introduced in 2008).
In this month’s edition of the Magazine, I have reminded Clubs of the long campaign waged by Dransfields and confirm that this type of machine is, once again, free of both VAT and AMLD.
This type of machine should not be confused with the simple pull tab cardboard ticket dispensers that have always been considered and remain being free of both VAT and AMLD.
Phonographic Performance Limited (PPL) is an organisation which recovers royalties on behalf of its Members. Any organisation which plays music in public, including Private Members Clubs, requires a licence in order to broadcast the music. The proposed changes do not relate to the standard tariff charged but do affect Clubs which host events in which live music is played or performed. This is referred to as ‘Specially Featured Entertainment’.
The proposed tariff revision structure is wholly unreasonable and the ACC, along with CORCA, have made a robust objection to the proposals.
In my view, suggesting such changes in the midst of an extremely difficult financial trading time for all Private Members’ Clubs suggests that PPL are seemingly divorced from the reality that most business within the leisure industry are currently operating under.
It is fair to say that these proposals will be resisted across the whole licensed and leisure industry and that the more responses that PPL receives from Clubs condemning the proposed changes the more difficult it will be for them to implement these changes.
B3A Automated Lottery Machines VAT and AMLD Exempt
As regularly reported in the Conservative Club Magazine over the last four years, the ACC’s recommended gaming machine supplier Dransfields, has been involved in a “David and Goliath” struggle with HM Revenue and Customs over the taxation treatment of B3A automated lottery machines.
It is worth reflecting that this battle was fought because clubs all over the country were facing retrospective tax bills of up to four years VAT on the takings from the machine and up to three years Amusement Machine Licence Duty (AMLD). The AMLD bills alone would have been in excess of £6,000 which together with the VAT liabilities could have caused the closure of many hundreds of clubs.
As Dransfields had supplied some of these machines, they were determined to protect clubs from what they saw as an unjust and incorrect ruling made by HMRC. Four years later, there is finally clarity and the taxation position is as follows:
• The machines are and always have been exempt from VAT. Any club that has declared VAT on the takings within the last four years should claim it back and do so as soon as possible to avoid being out of time.
• The machine is exempt from AMLD. Dransfields are in the process of claiming this back on behalf of ACC customers for the period back to July 2009.
• The machine was subject to AMLD for the period 01/11/06 to 20/07/09 due to a legal technicality. Any club that has received a demand for payment AMLD that falls within this period must pay it. Very few Dransfields customers are affected as AMLD was already in place for nearly all of this period.
Chris Haley, the Managing Director of Dransfields has expressed his gratitude to the support given by the ACC during this difficult period.
To any club that is not a Dransfields customer and would like to know more about the B3A machine and take advantage of their unique exemption from VAT and AMLD then see the advertisement on page 6. They have a large variety of B3A machines in stock and available for immediate delivery.