Golf clubs bunkering down on business rates

As struggling clubs seek to boost membership, business rates hit some hard

14 August 2017

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My work as a Chartered Surveyor providing business rate advice is demanding (we have a great variety of clients), but also very rewarding (we have great expertise in reducing business rate bills). But like most people, I need to be able to switch off and relax, and the thing I enjoy most of all in my free time is playing a round of golf. It’s sociable, healthy and relaxing, and it’s great to be outdoors so much – weather permitting! I’m a member of Bargoed Golf Club and play with a handicap of 2, which I try to maintain by playing at least once a week and going to the driving range every week.

Sometimes work combines with play. Cooke & Arkwright advise a number of golf clubs on their business rates and we successfully appealed the 2010 rating assessments of four leading golf clubs in South Wales, reducing their Rateable Values (RV) by several thousand pounds per annum. The 2017 revaluation (the first in seven years) has caused a good deal of controversy, with big increases for many businesses around the country hitting the headlines. Over a quarter of all golf clubs in England and Wales saw substantial increases, and assessments for almost three-quarters have either fallen or stayed at the same RV as the 2010 rating list.

So why have so many clubs been ‘hit into the rough’ while others have made a ‘recovery’? Why is the picture so mixed? It’s quite complicated.

In recent years, membership of golf clubs has been falling and clubs are looking at other ways to increase revenue. One of the hardest hit golf clubs in England and Wales saw its business rates increase by nearly 50% annually, after it had been developed as a boutique holiday lodge park as well as being a championship-standard golf course. These sorts of factors have to be taken into account when assessing the value of a golf course. There are various golf-related categories appearing in the rating list, including county, championship, sports ground and premises, clubhouse and premises, and local amateur sports club.

Take the latter category as one example. There have recently been changes to the Community Amateur Sports Club (CASC) regulations. The CASC scheme aims to ensure that qualifying clubs are open to the whole community, including those on modest incomes. Being a member of CASC allows local amateur sports clubs to register with HMRC and benefit from a range of tax reliefs including reduced business rate bills. The changes, introduced in April 2015, included increases in exemptions, new income limit conditions, a requirement to have 50% participating members, and restrictions in the levels of membership costs. HMRC has to be satisfied that clubs do not charge more than £1,612 for membership, which is made up of joining fees, plus any costs that are a condition for membership, for example, fees charged to play in a match, insurance costs to be a member, hire of equipment etc. If these associated costs amount to more than £520 per annum, clubs will need to ensure that those who can’t afford to pay can still become a member and fully participate in sport at the club. Since the changes were introduced, many clubs are no longer eligible for the scheme and this has had an impact on their business rate liability and other taxes.

As mentioned earlier, it is complicated. Our business rate team provides expert advice to golf clubs to help them negotiate the regulations surrounding business rate relief and make sure they are not paying more than they need to. It goes without saying that I personally find it disheartening if golf clubs go out of business. Golf is great fun. It offers a range of recognised benefits including improved physical fitness, reduced stress and anxiety, exposure to the outdoors and increased social interactivity. As the saying goes – “it’s easy to learn, but impossible to master”, so there’s always a challenge. You’ll find me on the green next weekend!

Liz has been an absolute star, providing excellent support and great professional advice. We have been working on very complex acquisitions/CPOs and the process has been made so much easier by her enthusiasm and friendly approach and has been a great addition to the team. Cooke & Arkwright have made a very complex acquisition and CPO strategy so much easier with their excellent and friendly professional advice. They have been a great addition to the team.

Hamish Munro, Caerphilly County Borough Council