Victory over VAT for Goals Soccer Centres

City Editor

Friday 14 September 2012

MANAGERS at five-a-side football operator Goals Soccer Centres are celebrating a lucrative victory over the taxman after winning an appeal against a ruling that value added tax (VAT) should be charged on league bookings.

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tim sharp city editor

The decision will boost Goals's profits by around £500,000 a year. The news gave a sharp fillip to the East Kilbride-based firm's share price, which bounced 4p, or 3.4%, to 122.5p.

Goals's privately owned arch-rival, Glasgow-based Powerleague will also be among those to benefit.

Between them, the two Scottish companies operate around two-thirds of the UK's five-a-side football sites.The case will make no immediate difference to the £5.50-a-head fee paid by players but it removes the threat that charges might have to go up by around £1 to cover the additional cost.The case dates back to February 2011, when HM Revenue & Customs issued a briefing document indicating that all income relating to commercially operated sports leagues should be standard rated for VAT purposes.In March it confirmed to Goals that the company should treat pitch block bookings by league customers as being standard rated.Firms had been treating commercial sports leagues as zero rated on the basis they were supplying land of a kind that was VAT exempt.The taxman had argued that in fact sports league providers supply a bundle of services and that the overarching element is participation in a sports league not the provision of land.Tax experts say that the case is unlikely to have consequences far beyond the football market.The likes of golf clubs and tennis clubs are already exempt on a different basis, meaning they do not charge VAT on fees.Meanwhile, other operators prefer to charge VAT so they can offset it against VAT-able expenditure.The news is the latest installment in a busy year for Goals which was last month hit by a shareholder rebellion over its proposed takeover by one of Canada's biggest pension funds.The Goals board had accepted a £73.1 million bid from the Ontario Teachers' Pension Plan. But the deal failed to attract enough votes to clear the offer. A total of 71.4% of votes cast backed the move – short of the 75% required.Goals, which employs about 800 people, made a pre-tax profit of £9.2m in 2011. It operates 43 outdoor centres in the UK and one in the US.The company said in February that paying VAT had added £800,000 to its tax bill for 2011.In early 2012, the company put its expansion plans on ice with the intention of getting greater returns from existing centres before returning to its opening programme in 2013.The company has developed a modular building technique.Goals said the concept should reduce capital expenditure from £2.3m to £1.5m per centre and cut build time from 22 weeks to 14 weeks.

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Victory over VAT for Goals Soccer Centres

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