Do Affiliation Fees Represent Good Value for Money?

Affiliation fees are charged by England Golf and the county golf unions and amount to just under, or just over, £20 per annum, depending on which county your facility lies in. England Golf has two main forms of income: one is government funding via Sport England, and the other is its income from affiliation fees. You can see in the government brief below that a concession previously in place, which allowed affiliation fees to be devoid of VAT, has now been withdrawn. This means the proprietary clubs will have to charge VAT on top of the affiliation fees to their members. Private members clubs, which we must remember do not pay VAT on subscriptions - or on green fees - will continue to be able to pass on their affiliation fees without VAT.

While this may only result in an additional fee of £3-4 per person, there is an important principle at stake: it is another example of one rule for proprietary clubs and another rule for members clubs. Posh exclusive golf is subsidised by the government, whereas open-access, user-friendly golf is charged at the full taxable rate; regardless of how unfair it seems, this is the case for the main part.

VAT changes for proprietary clubs with regards affiliation fees from 1 April 2018

A concession which has allowed proprietary golf clubs to treat affiliation fees as VAT-exempt is being withdrawn by HMRC.

Membership subscriptions at proprietary clubs have always been subject to VAT, but HMRC has previously allowed affiliation fees to be treated as a disbursement and, therefore, exempt.

This decision has been made despite lobbying by England Golf and comes into effect on 1 April 2018. From that date proprietary clubs who re-charge affiliation fees to their members as a disbursement will have to charge VAT at the standard rate of 20% on their members’ affiliation fees to England Golf and to their County Union or Association.

This means that for 2018 the England Golf affiliation fee of £8.25 will need to be charged with 20% VAT of £1.65, making a total of £9.90. The County affiliation fee will also need to have VAT added and will need to be declared as output VAT on the club’s VAT return.
The withdrawal of the concession only affects proprietary clubs and non-profit making members’ golf clubs should continue to treat affiliation fees as VAT exempt, together with membership subscriptions.

England Golf is continuing to ask all clubs to continue to show affiliation fees separately to the main subscription when billing their members. This tells the member exactly what they pay to the different organisations and highlights to them that they are a member of England Golf and their County Union or Association, as well as their club. 

In the HMRC policy paper, which was published in January this year, it was stated that:

HMRC consulted and called for evidence on the withdrawal of the concession in January 2017.

Since no difficulties were raised, the government has decided to announce withdrawal now so that clubs can make arrangements to charge VAT on these charges with effect from 1 April 2018.

England Golf has always claimed to support both proprietary and members club sectors equally on this point on affiliation fees, but are now throwing up their hands, saying ‘It wasn’t us wot done it.’
HMRC state that they consulted and called for evidence in relation to the withdrawal of the concession - they say no difficulties were raised. Someone is telling fibs.

England Golf is also trying to assert that a golf course or club has to collect affiliation fees from every single member who has any form of playing rights on the course. This includes young children, or members who may play just a few holes in the summer at the twilight of their careers. This is a blatant tax on golf and should be resisted by all golf clubs. The truth about affiliation fees is that they are all to do with more formal golfers who wish to hold handicaps and play in formal competitions. England Golf has no business taxing golfers who purchase a season ticket to play their golf at a course. Many of these players do not wish to play in formal competitions, or even hold a handicap, and they are in the majority. I do not think that it is right that these people are charged £20 by a governing body that does little to help them. I think it is even more unfair that golf courses, especially proprietary clubs which have the additional burden of taxation, have to pay these affiliation fees for any golfer who has an annual pass on the golf course.

This is poor form by England Golf and a cack-handed power grab. It has always been the members of a golf club, who cannot be influenced by a proprietor, who actually affiliate to the county golf union and to their national golf union (see the Apple Golf Club Constitution below). This is still the case. In trying to make all clubs and courses responsible for paying affiliation fees for everyone, England Golf is looking to secure massive funding for the future. Nice try. Unfortunately, this is contrary to the interests of the golf industry and the sport as a whole. I am sure that ultimately England Golf would also love to raise a tax on green fees and perhaps even range usage. Since the more money they need to run the sport seems to correlate with a drop in participation, then this will probably coincide with almost all golf courses closing.

Those keen golfers should create themselves into clubs and play golf to their hearts content in formal or informal competitions and be entitled to hold the CONGU handicap. For this they pay their affiliation fee and most of them will think it is excellent value. For those of us who are growing the game and are trying to encourage more people to play, an extra £20 worth of taxation is dreadful value and it must be resisted.

England Golf is very sketchy about the whole process of affiliation, as it represents such a huge problem for them as an organisation. They think they need a bigger administration, yet the larger the administration becomes the fewer people seem to want to play golf. Perhaps this is not an accident. Golf only occurs when it is played on a golf course or on the golf range. If the golf courses and golf ranges all disappeared, there would be no golf - lots of people will be miserable and the world would be a poorer place. If England Golf vanished overnight, most people would not even notice. No one would miss them and Woodhall Spa would become an interesting venue, rather than the home of an irrelevant and outdated organisation trying to be a governing body.

There is, of course, a great solution.
The solution is fair and will allow England Golf to raise all the affiliation fees that they like, providing the public think that it is good value for money. This route is for England Golf to contact each individual golfer and offer them direct affiliation. I think the number of affiliated golfers would plummet, as a golfer would quickly see that it is a bad return on their money. Sometimes it is appropriate to have growth in an organisation, and sometimes it is appropriate to downsize. A substantial downsizing of England Golf is called for and they have brought it on themselves.

Scottish Golf has just appointed a new chief executive and he starts in May. Good luck to Andrew McKinlay – he is going to need it. They had previously proposed a ridiculous doubling of the affiliation fees. This was the brainchild of the small-brained Blane Dodds, who promptly resigned and left to run tennis in Scotland. Good luck to Scottish Tennis - looks like they will need it. The numbers of affiliated golfers in Scotland have fallen dramatically in recent years and somehow Scottish Golf think that they need to collect more money in order to continue this decline. Interestingly, the salaries of those running Scottish Golf have increased, despite participation falling.

Having lost the vote to double affiliation fees, it is now proposed to increase Scottish affiliation fees to £15. This will also meet with resistance from ordinary golfers. Men and women of sound mind do not want to pay a ridiculous administration any more to play a sport that needs no administration. To pay a so-called national governing body more money, despite the fact that they are hopeless at increasing participation makes no sense.

One of the criteria used to determine how much funding a body gets from Sport England is how many people that body actually represents. So the situation for England Golf is far worse, as they need to claim all of the golfers possible in order to continue their funding from Sport England. This has already been reduced and it is unlikely to see it rise in the near future. There is a real problem coming, because many of the people that work for, and with, England Golf are well intentioned and genuinely want golf to be played more easily by more people. BUT - and this is the real problem – many of the county unions, who are the principle stakeholders in England Golf do not want change and are determined to hang on to control of the alleged governing body for golf in England. Golf is a sport where the rules are set by the R&A and handicaps are administered through individual golf clubs, with a guiding hand from CONGU (the Council of National Golf Unions). England Golf has some work to do in running elite competitions and is also meant to be growing the game. Over the last twenty years affiliation fees have risen, Woodhall Spa has been acquired, and the number of golfers has declined – not a great use of the money.

Topgolf creates thousands of new golfers each year for each site that it operates. Its product is exciting, it is technology rich and customer friendly – people love it. This is an ideal way to get people interested in golf. Adventure golf is another great booster for the numbers of golfers wanting to start. The Golf Foundation is brilliant at getting children to start and should be given four times the funding it currently receives. Many of the children who start playing golf (with the Golf Foundation and other schemes) often stop playing, as adolescents and young adults have a variety of options for their busy lives and golf is very time consuming. These previously taught, ex junior graduates of the Golf Foundation often ignite their interest in golf again as they get older and are not lost to the sport forever, even if they choose other activities as they mature. But taxing them to the tune of £20+ per head is exactly the way to discourage them from retaining any playing rights they might have at their local club.

England Golf needs to slim down as an organisation, dump the county unions, sell Woodhall Spa and move to a more convenient location. If it does, then it might even survive. More of the same is not sustainable.

Vivien Saunders is to contest a major case based around Affiliation Fees - coming to the courts in May

Vivien Saunders OBE, has long been the scourge of the ridiculous unfairness within golf and has never received the recognition she deserves for her tireless endeavours. Vivien is a former tour player, winning The Ladies British Open in 1977 and several other titles. She has been a noted golf coach, a prolific author and a qualified solicitor. Saunders received the OBE for services to women’s golf in the 1998 New Year Honours. She has earned the right to speak on any issue in golf – she is also the founder and Chairman of the Association of Golf Course Owners.

Vivien has shared her recent response to an email from Simon Wilson from England Golf, which is hugely relevant to this current debate and highlights what a tangle England Golf are in over this whole issue:

Dear Simon,
VAT and affiliation fees
Your email to me this morning reads:

The bottom of the HMRC issued guidance of the 18th Jan states that affiliation fees to NGB’s and other similar bodies remains fundamentally VAT exempt. It is only the action of a proprietary club recharging its members that will cause the fee to have standard rated VAT. Hence counties or EG cannot issue VAT receipts as it would still be an exempt supply. This is not something that we have any option on as bodies (ie counties) cannot register for VAT if they make no taxable supplies. 


Your email and interpretation of this is wrong. The VAT position of fees paid to EG and counties is in front of the Upper Tribunal in May. If you look at the guidance from HMRC which you have forwarded to all clubs you will see that it refers to VAT Notice 701/45 and paragraphs 3.6.1 and 3.6.2 and also to the VAT Manual VS2020. 

In paragraph 3.6.1 HMRC refer to clearly says: 
Supplies to commercial organisations should be treated as taxable since the true beneficiary of the service is unlikely to be individuals taking part in the sport.

And the VAT Manual VS2020 extract HMRC refers to reads:
Supplies made to commercial profit-making organisations do not meet the true beneficiary test and will not fall within the exemption for supplies of services closely linked and essential to sport.
Those two sections clearly mean that supplies by EG and counties to proprietary clubs, i.e. our businesses, are NOT VAT exempt. 
  In updating the documents for the UTT, I have included the document put out by EG regarding club audits which makes clear EG and counties seek to extract a fee from all classes of golfer – from staff through honorary members, young children, overseas players and so on. This clearly falls foul of paragraph 3.6.1 quoted above because many of those golfers receive no benefit at all from EG or counties. For a start, counties say the children can’t have county cards and overseas members have handicaps elsewhere!
  HMRC’s notice explains how the affiliation fees could be VAT exempt for all, i.e. by making fees the liability of the individual golfer. They could then be collected as VAT exempt disbursements.  The guidance note even points to paragraph 25.1.1 of VAT Notice 700.That would mean the golfer having a choice. May we invite EG now to see fair play for all golfers and make the fees the liability of the golfer and not his/her club or the business of the golf course owner?

Terms of Affiliation
The EGU terms of affiliation through the 1980s and onwards were specific in the requirement of having a members’ club at each new proprietary course. In effect the EGU said: “We don’t want these newcomers building golf courses and running the game. We will see that there are traditional committees of amateur golfers in charge. And those affiliated clubs will have the link to counties and EGU – the representation, the vote – not the owners.”
Golf course owners were not affiliated to the EGU and they are not affiliated to the new merged organisation. It is only a few old proprietary clubs like Sonning where the proprietary club is affiliated.
When the EGU and EWGA merged in 2011, it was the members’ sections and delegates who had the vote – not the course owners. The Articles of Association of the new EG/EGU company recited that the non-voting members (i.e. the clubs) are the former non-voting members of the EGU and of EWGA – and that is the members’ sections.
Season tickets and affiliation fees
I must also remind you of your statement regarding municipal courses with a members’ club playing on it. You say no affiliation fee would be payable for the season ticket holders but only the club members. But if a proprietary golf course owner has season ticket holders who do not choose to join the members’ club you will extract an affiliation fee from the owner. 

At Abbotsley Ltd we have sent out renewals for our annual golf fees and separately the fee to the Cromwell Club, which is the affiliated members’ club. So far 30% who have paid their golf fee have elected not to join the members’ club and no affiliation fee will be paid for them. This is exactly the same situation as the London Corporation, which takes season tickets for the golf in Epping Forest but only the golfers who join one of the Chingford clubs (less than 50% of the golfers) have to pay affiliation fees. 

That is how we are now advising all golf course owners to structure their affiliation fee process to ensure that no golfer has to pay VAT on his or her affiliation fees.

County cards not VAT exempt
The affiliation fee to most counties only provides one benefit – the county card. As a discount card that should be standard rated and not VAT exempt. If county cards have no value, abandon them. If they have a value, pay over the VAT element. Cambridgeshire charges them at £15 for women but includes them in the affiliation fee for men. That’s the value - £15. Hopefully we will get some statement within the UTT confirming the VAT status of county affiliation fees with the county card wrapped within them.

An agreed statement please
I will ask you once again to put out an agreed statement with AGCO regarding the affiliation fees, correcting your assertion that VAT is payable at proprietary clubs. It isn’t; the members’ sections are affiliated, not the owner’s business. The VAT status of those members’ clubs at proprietary courses is one of the keys to the UTT in May. I will explain that in a letter because it is complex and technical. And the fees would be VAT exempt for all if they were made the liability of the individual golfer as in other sports. Equally please now think again the comments that fees charged to proprietary clubs are VAT exempt. 

Vivien Saunders OBE
Abbotsley Ltd.and The Association of Golf Course Owners
Abbotsley Golf Hotel and Country Club

The best club constitution for proprietary clubs and courses
For those who want a simple constitution, which allows for a members club within a proprietary set-up, then the following has been used and adapted by dozens of clubs across the country. It essentially sets the business of the ‘club’ as being handicaps and competitions and prevents the proprietor from rigging either of these elements. I wrote it in the early 1990’s and it was not questioned at any time by the county unions or the English Golf Union. I have changed the name to ‘Apple Golf Club’ to throw people off the scent, but it wont take a sleuth long to track down its origins. If the club becomes a nuisance to the business, then it can be disbanded immediately (this is useful, as a club or course can often be involved in bank finance and banks don’t like conditions on their assets).
If you want to pay less in affiliation fees, then a constitution such as the one laid out below will ensure that happens. I would like to see England Golf try to eject a club from its embrace for refusing to tax children or doubling taxing golfers of two clubs.

Apple Golf Club


The Club shall abide by the rules of the County Golf Union. In particular the Club must comply totally with the regulations and rules of the S.S.S. and handicapping scheme 1983 and any conditions imposed within the scheme by the English Golf Union. The Club agrees to adopt the EGU/ELGA Equity Policy.

Officers of the Club
The Officers of the Club shall be the Proprietor, Men’s Captain, Ladies Captain and the Handicap Secretary. The Men’s Captain, Ladies Captain, and Vice Captains shall be elected at the Annual General Meeting and as many other members of the Competition and Handicap Committee as the officers of the club decide.

The Annual General Meeting
The AGM shall be held each December. The Proprietor shall publish the date of the AGM at least 14 days before it takes place. The AGM shall cover the election of:
Men’s Captain
Ladies’ Captain
and other members of the Competitions and Handicap Committee. The Proprietor may
not vote at the AGM but may be present.

The AGM shall hear a brief report from the Proprietor. He shall accept nominations from the membership, in advance of the AGM for the Men’s Captain, Ladies Captain, & Treasurer. The Proprietor shall organise the voting system for electing these officers. Only members present at the AGM may vote. No posted votes or proxy votes shall count.

The Competitions & Handicap Committee
The officers of the club (the Proprietor, the Men’s Captain, Ladies Captain, The Handicap Secretary) and others form the Competition and Handicap Committee.

The Competitions and Handicap Committee shall meet at least twice a year. All members of the committee must be informed of the meeting in reasonable time. The Handicap Secretary can call as many other meetings as necessary to cover handicap matters only. At least three members shall be present to constitute a quorum.
The business of the Committee shall be:
The fair allocation of handicaps under the    English Golf Union and Ladies Golf Association  regulations.

The general running of competitions and    events.

Any disciplinary matters regarding a member’s  conduct during competitions.

The handicap and competition committee shall be responsible for the collection and payment of all affiliation fees due to the various golf unions. In order to preserve the golf centre’s position as a provider of inexpensive golf to all levels, these affiliation fees may only be collected from golfers who wish to hold an official CONGU handicap at the club.
The Committee has the power to suspend a member from competitions for an unlimited period. Any suspended member may appeal in writing for a period of 28 days after any such disciplinary action. The Committee ruling may only be overturned by the Proprietor.
The Proprietor shall arrange for all other matters relating to the running of the business, the course, the clubhouse and other buildings. Any complaints or suggestions should be made in writing to the Proprietor. The Proprietor reserves the sole right to amend the constitution, dissolve the club and the Committee at any time.

Rules and Conditions of Membership
A membership will start when the application and the subscription are accepted by the proprietor and will end 365 days later. Life Members must pay their annual affiliation fees each January if they wish to retain a handicap and play in competitions.
Members must abide by the Rules of Golf, the Rules of the Course and observe golf etiquette at all times. The Proprietor reserves the right to change and amend any rules of the course and any rules and conditions of membership.
Members shall be entitled to use and enjoy the facilities of the club in accordance with their membership category. However the Proprietor reserves the right to close the course, clubhouse and other facilities at certain times for reasons of inclement weather, alterations, maintenance and events not open to members or any other reason that the proprietor shall decide.
If at any time, it is considered by the Proprietor that a member’s conduct is not in the best interests of the club that membership shall be cancelled by the Proprietor. In such circumstances the member shall not be entitled to any refund.
Rules of the Course
All players must sign in the shop before play.
Players with a booked starting time have priority.
All players must abide by the Rules of Golf and observe golf etiquette at all times.
• Slower players MUST let faster players through.
• All players must have a bag of clubs each.
• Smart dress is required. Torn & dirty clothing is not acceptable. Golf shoes are expected.
• Shirts must be worn.
• At busy times the Professional staff reserve the right to join up one and two ball matches.
• All players and spectators are legally responsible for their own safety and for any damage they cause to other people and/or their property.
• Green fees will not be refunded.
• The wearing of ties is strictly forbidden, both on the course and in the clubhouse!

There is much to consider for England Golf, golf owners and operators, and we look forward to hearing your ideas and responses.