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Droitwich Spa Boxing Academy, which only recently moved to its new premises after years of fund raising and hard work, is facing a ruinous £52,000 VAT bill that could close it down. Local MP, Sir Peter Luff, today (3rd December) raised the club’s situation at Prime Minister’s Questions.

The boxing academy recently opened its brand new facilities but HMRC is demanding that VAT is paid on the construction costs. The VAT bill is so large that the Academy may be forced to close.

Sir Peter explained the problem,

“I greatly admire Chris Andrews, the Club Secretary, and all the other volunteers involved for their dedication and work for the Academy. The club offers mentoring services for young offenders and takes referrals from Social Services and Probation, as well as providing a fun way for young people to exercise. It is a real community resource and if closed it would be a disaster for the town and the county.

“VAT rules mean that village halls and similar buildings, as charitable organisations, are not subject to VAT. Considering themselves a charitable sports club and their new building a multi-purpose sports hall with uses like those of a village hall, the Boxing Club went ahead with building the new facility in good faith that they would not be liable for VAT.

“When the huge demand from HMRC came in February, the Boxing Academy got in touch with me as they knew they had no way of paying this extraordinary sum. I have been making representations to HMRC and arranged a meeting with a Treasury minister, but frustratingly I don’t feel the Academy’s case is being understood. If HMRC insist on payment, the club will almost certainly close and they will get nothing.

“I know that the Treasury are able to waive VAT in some instances – the Chancellor did so last month for the poppies at Tower Hill. So, given the vital role the club plays in turning around young lives, I wanted to raise this case with the Prime Minister in the hope that a solution can be found that allows the club to remain open.”

Today at Prime Minister’s Questions, Sir Peter asked,

“Droitwich Spa Boxing Academy, run entirely by volunteers, trains talented boxers and provides a highly valued community resource turning around the lives of scores of disruptive and troubled young people. It is a shining example of the Big Society. Does the Prime Minister understand my deep concern that the blinkered decision of HMRC to insist on a draconian interpretation of the VAT rules on its new building will result in the Academy’s closure?”

The Prime Minister replied,

“Well first of all I know what an important job the Droitwich Spa Boxing Academy does. It is run entirely by volunteers and I know how hard my right hon. Friend works for his constituents. We will look carefully at this case. As he might know, unfortunately zero rating of VAT on construction services is very limited and doesn’t apply to buildings used as sports clubs.

“HMRC are willing to discuss flexibility on arrangements to pay the VAT bill, through their Time to Pay Scheme, with the owners. What I will make sure is that these discussions take place very rapidly between my hon. Friend and HMRC to see what can be done.”

Afterwards Sir Peter commented,

“The PM's response fell short of my hopes but does at least give the academy more time to see what can be done to prevent closure. I will now seek to work with the academy, the ABA, Sport England, Wychavon District Council, Worcestershire County Council, Droitwich Spa Town Council and, of course, HMRC to safeguard the future of Droitwich Spa Boxing Academy.”


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