Golf club finance for courses, clubhouses and machinery

Only in part, and the shortfall should be in the budget before the club borrows. A non profit making members' club makes exempt supplies of sport, which cover subscriptions and most playing fees, and taxable supplies in the bar, the restaurant, the pro shop if the club runs it, buggy hire and advertising. VAT on costs that relate only to the taxable side is recoverable in full, VAT on costs that relate only to the exempt side is not recoverable at all, and VAT on overheads is split under the partial exemption rules. Course works, irrigation, bunkers and drainage sit squarely on the exempt side, so a £600,000 drainage scheme can carry £120,000 of VAT that the club will never see again. Lenders know this, and they expect the loan to be sized on the gross figure. We arrange course works finance for members' and proprietary clubs, and we ask the club's accountant to confirm the recovery rate before the facility is agreed so the term loan covers the real cost.

Are green fees VAT exempt for a members' golf club?

Yes, for a non profit making members' club. Since the Bridport and West Dorset Golf Club case HMRC accepts that green fees charged to visiting non members by an eligible body are exempt in the same way as members' subscriptions, and many clubs recovered VAT they had paid on visitor fees in earlier years. A proprietary club run for profit charges VAT on green fees and subscriptions at 20% and can recover the VAT on its costs in the normal way. The exemption is set out in HMRC's notice on sport supplies.

• Eligible body. The club must be non profit making, with its constitution preventing profits being distributed except to another non profit body or to members on winding up, and it must not be subject to commercial influence.
• Partial exemption. A club whose exempt input tax is below the de minimis limits can recover it all, but a large course project pushes most clubs well past those limits for the year it is paid.
• The clubhouse. A bar and catering refit relates to taxable supplies, so a project that combines course and clubhouse works should be invoiced in parts to protect the recovery on the taxable element.
• CASC and charity clubs. Community amateur sports club status affects rates relief and gift aid rather than VAT, and the sport exemption applies in the same way.

HMRC explains the exemption in VAT Notice 701/45 on sport and the recovery rules in VAT Notice 706 on partial exemption. Our tennis club finance page covers borrowing by a CASC, sports club finance covers other members' clubs, and VAT loans spreads a quarter where the club has a bill to pay. Instant Quotes shows which panel lenders fund golf clubs without a credit search.

Yes. A clubhouse roof, a machinery shed and a car park canopy are good sites for solar, the club uses most of its power in daylight through the summer when the array produces most, and lenders treat the system as a fundable asset. The usual structure is hire purchase or a lease over five to ten years, with the monthly payment set below the saving on the electricity bill so the project is cash positive from the first month, and a battery or a bank of EV chargers can be added to the same agreement. Larger ground mounted schemes on spare land are funded with a term loan secured on the course or through a power purchase agreement where a third party owns the array. Lenders ask for the installer's yield forecast, the last twelve months of electricity bills, the roof survey and the club's accounts. We arrange solar and battery finance for golf clubs, including members' clubs where the committee needs a fixed cost it can put to the AGM.

Do solar panels on a clubhouse need planning permission?

Often not, in England. Permitted development rights allow solar panels on the roof or wall of a non domestic building without an application, provided the panels do not protrude more than 200 millimetres beyond the roof slope or wall surface, do not sit higher than the highest part of the roof excluding the chimney and are removed when no longer needed, with extra conditions on listed buildings, conservation areas and other designated land. Ground mounted arrays have their own limits, and a large field scale scheme needs a full application. A short call to the planning department confirms the position, and the installer should give the club the DNO connection approval before anything is ordered.

• Listed clubhouses. A listed building needs listed building consent for panels even where planning permission is not required, and many older clubhouses are listed.
• Grid connection. Any system above a small threshold needs the district network operator's agreement to connect, and an export limit can change the business case.
• Capital allowances. Solar panels are special rate plant, which the annual investment allowance still covers in full up to its limit, so a club that pays corporation tax on its non member income can deduct the cost.
• Mutual trading. A members' club does not pay corporation tax on income from its own members, so the tax relief on the array is worth less to it than to a proprietary club, and the saving on the bill is the number that matters.

The Planning Portal explains the rules for solar panels and GOV.UK covers capital allowances. Our EV charging finance page covers car park chargers, asset finance compares hire purchase with leasing, and leisure centre finance covers larger energy projects at sports venues. Instant Quotes shows which panel lenders fund solar for clubs.

A golf club's income usually comes from several streams at once. Members' subscriptions are often collected around an annual renewal date, which can leave a club with plenty of cash in spring and less by the autumn. Green fees, visitor and society bookings, competitions and corporate days add income in the playing season. The clubhouse bar, catering, functions and weddings, the pro shop, buggy hire and a driving range can all make a real difference to the margin.

The costs are heavy and steady. Greenkeeping staff, a fleet of mowers and utility vehicles, fuel, fertiliser, irrigation, water, energy, business rates and clubhouse upkeep run all year, while visitor income falls away in winter and in wet spells. Machinery, buggies, bunkers, paths and irrigation all need replacing on a cycle, and clubhouses tend to need large refurbishments every so often. Good golf club finance matches each of those costs to the right kind of borrowing.

• Replacing a buggy fleet, or adding buggies to grow hire income
• Replacing greenkeeping machinery: fairway, greens and rough mowers, tractors, sprayers and aerators
• A new or upgraded irrigation system, pumps and controls
• Refurbishing the clubhouse, bar, kitchen, changing rooms or function suite
• Driving range bays, ball dispensers, ball-tracking technology and floodlights
• Indoor simulators, a studio or a short game area
• Rebuilding greens, tees and bunkers, or drainage works
• Adding padel courts or other facilities to bring in new members
• Buying the freehold, buying another course or refinancing existing borrowing
• Cash flow before subscriptions are renewed, and VAT or tax bills

How a club is set up decides which lenders can help. A proprietary club owned by a limited company borrows like any other business, usually with the directors' personal guarantees. A members' club may be an unincorporated association, a company limited by guarantee, a community benefit society or a registered community amateur sports club (CASC).

An unincorporated club has no separate legal identity, so it cannot borrow or give security in its own name; borrowing usually has to be arranged through trustees or a club company, and fewer lenders will consider it. A club registered as a CASC has rules on how it uses its income and assets, set out in HMRC's CASC guidance. Check your club's rules on borrowing, and whether members need to vote, before you apply.

Golf income is sensitive to the weather and to membership trends, so test repayments against a cautious year, not a good one. Borrowing over a long term for assets that wear out quickly can leave a club paying for machinery it has already replaced. For proprietary clubs, personal guarantees are common; our guide to personal guarantees explains what that means. Members' clubs should be clear about who carries the liability if the club cannot pay.

Before borrowing, consider whether a supplier finance offer, a members' levy or debenture, or grant funding from Sport England for community use would cover part of the cost. Capital allowances such as the Annual Investment Allowance may apply to some equipment; ask your accountant how they apply to your club.