Club Law and Management
by Philip Smith, Secretary of the A.C.C.
Gaming Machines VAT Refund Linneweber Claims Payout Update
Clubs will be aware that there has been a long standing case in which the ACC has been actively involved. The first notice and advice to Clubs dates back to an article in the August 2006 edition of the Conservatives Clubs magazine, when I first advised Clubs that they should submit a claim for an overpayment of VAT in relation to Gaming Machines.
Clubs were able to claim VAT paid on the net take from Gaming Machines for the three years up to December 2005.
Clubs which submitted an appeal, under what has become known as the ‘Linneweber case’ should have received, or will be receiving, assessments from HMRC. These assessments will be accompanied by either a cheque or a credit being placed on the Club’s HMRC account. The amount will relate exactly to the figure which the Club originally claimed. HMRC has decided to pay out these claims pending a final appeal which is set to be heard at some future date. It is widely suspected by most commentators that this final appeal will not to be successful for HMRC. However, due to the fact that the payments are being made on the basis of ‘protective assessments’, all Clubs receiving refunds should note that in the event of the appeal being won by HMRC, the refunds will have to be repaid. We suggest placing a ‘provision note’ in the Club’s accounts to this effect.
We are advising all Clubs in receipt of a refund to bank the cheque which arrives from HMRC, or in the case of a credit to offset this amount against future VAT payments. In either case it is important to submit a further claim for interest owed on the amount claimed. This involves writing a letter to HMRC quoting your VAT number, their letter referencenumber and stating that since the original VAT payment was made in accordance with HMRC guidance, the Club is entitled to ‘official’ interest on the repayment. You should not use a ‘Notice of Appeal’ form to submit this interest claim. The Club is not appealing the amount paid; it is simply requesting payment of interest.
It is disappointing to note that HMRC has not applied ‘official’ interest to the amount being repaid. Over the period that the claims were made, interest rates were higher than they are today. We have received advice that interest on these claims could be calculated to as much as 37% of the final amount. Clubs will appreciate therefore that it is well worth submitting a further claim for this interest.
The ACC considers this to be a significant victory for Clubs and any repayments received will be a timely help for all Clubs but in particular for those which may be struggling. The ACC is happy to say that the majority of our Member Clubs acted on our information and advice and made protective claims within the applicable time limit.
It is also important that we acknowledge and thank the invaluable assistance of Chris Haley, Director of Dransfields, the ACC’s recommended Gaming Machine supplier, for all of his assistance, professional advice and commitment in pursuing this matter.
Finally, we should record our thanks to the Rank Group PLC which took the lead case that ACC Clubs submitted claims under.
Consultation: Rebalancing The Licensing Act
Many Clubs will have been aware that in the past two months there has been a consultation on reforms to aspects of the Licensing Act 2003. The Home Office asked for this Association’s response to the Licensing Consultation which we duly submitted on behalf of all ACC Member Clubs. The ACC’s response is available on our website - www.toryclubs.co.uk. To see the actual consultation document please visit http://www.homeoffice.gov.uk/publications/consultations/cons-2010-licensing-act/.
The Government is aiming to tackle public drunkenness and to end 24-hour licensing with these proposals. As these aims were presented in the Consultation Document we concluded that there was not enough of a distinction regarding the proposals aimed at commercial establishments and proposals aimed at Private Members’ Clubs. It is our opinion that Private Members’ Clubs, such as ACC Clubs, play an important role in their communities and encourage responsible social drinking. Reforms aimed at tackling public drunkenness and unacceptable behaviour should be targeted at those responsible commercial establishments and not to legitimate Private Members’ Clubs.
Whilst we acknowledge the Government’s commitment to reform alcohol licensing law, it is imperative that this is directed at the specific causes of anti social behaviour and medical problems created by binge drinking. Crime and anti-social behaviour are problems not associated with Private Members’ Clubs but more likely with excessive supermarket discounting and lengthy opening hours for some licensed premises. ACC Clubs generally operate restricted opening hours and supply alcohol only to Members and their Guests. ACC Clubs are family and community friendly, with many raising money for local causes and being a central part of their community and such establishments should be supported and encouraged.
We have argued strongly against several of the proposals contained within this consultation document. One such proposal was that of tightening up of the procedure governing the use of Temporary Events’ Notices. Whilst the reasoning was to prevent festivals and rave organisers misusing these by apportioning parts of the same field so that multiple TEN’s could be used per year, the wording that was used was ambiguous and could be misinterpreted. To combat this we stated that:
‘We would also like clarification on the proposal that for certain locations there should be a restriction of one TEN being permitted per year. We have already seen this proposal misinterpreted by several publications which have incorrectly suggested that this restriction will apply to all premises when, in fact, it will only apply to selected locations where there is no permanent licensable activity going on. Private Members’ Clubs should not be affected by this proposed amendment.
In general, we must state how important TEN’s are to Clubs, in many cases it is being able to hold these 12 events per year which has allowed Clubs to survive. The provision of being able to hold a limited number of events which can be open to the public are integral to secure the future of many Clubs and we fully encourage the continued use of TEN’s and would strongly oppose any attempt to limit the number or functionality of TEN’s for use by Clubs.’
We also stated that we felt the restrictions that meant a Club’s Secretary was only authorised to sign five out of the twelve TEN’s allowed per year and then other Officers are needed to sign the remaining TEN’s was unnecessarily burdensome and should be scrapped.
Another point of contention was the proposal that Local Authorities would have the final decision over Licensing applications and decisions. Currently Magistrates Courts can overrule a Local Authority decision; it was proposed that this would be removed. We responded to this point by saying:
‘We are concerned that licensing authorities would apparently be able to both generate representations and determine their outcome. The ability to appeal to the Magistrates’ Courts was an important part of the 2003 Act when for the first time general licensing administration was removed from the Court’s discretion. As our Member Clubs have clearly defined political objects the appeal process to the Magistrates’ Courts can be an essential tool in dealing with any allegation of either political preference or bias by Local Authorities.’
The Consultation Document contained many proposals and ideas that will now have to be reviewed in light of the responses received. This is likely to take some time and we will provide further advice and information when final decisions are made. Generally the reform suggestions are based around the power that Local Authorities have when determining Licensing Applications, in so far as the proposals would mean both the Authorities and Police could reject applications without needing specific evidence to the contrary. We have generally opposed such measures, instead stating that is preferable having judicial oversight over such decision and that a level of proof should also be required prior to an adverse decision being made. As part of our summing up of the ACC’s proposals we stated that:
‘There is simply no need for further regulations to be placed on Private Members’ Clubs as the problems which the Government is attempting to solve are not caused by such establishments. We note from paragraph 5.01 of the Consultation Document that the main objective is to produce an “overhaul of the system to clamp down on binge drinking hotspots and irresponsible retailers”. None of which apply to the typical Private Members’ Club and certainly not ACC Member Clubs. Therefore we do not expect additional legislation or restrictions to be placed on such establishments which do not cause the problems this Consultation Document seeks to address.
Unless distinctions are clearly made between the way Local Authorities treat responsible suppliers of alcohol and the way they treat irresponsible suppliers of alcohol, then they will not be giving any motivation to specific problem premises to take responsibility for their actions.’
The ACC will continue to argue strongly against the introduction of any further legislation on Private Members’ Clubs, particularly legislation which would end some of the key benefits of the Licensing Act 2003. The purpose of that Act was that whilst it did increase compliance and licensing requirements for Clubs that in return Private Members’ Club would gain several benefits. It would be inappropriate for these benefits to be restricted or pared down without any additional allowances being introduced to replace them.
We will continue to examine any proposed amendments to the Licensing Act 2003 and shall provide updates when appropriate in The Magazine. Many proposals contained within the Consultation Document have been criticised by other organisations in addition to ourselves and we are confident that the Home Office will take into account all submissions prior to proceeding any further. We will always advocate the importance of Private Members’ Clubs and continue to object to any proposals which would further burden ACC Clubs.