The rules of a members club may provide for restricted categories of membership. For example, junior members may have rights falling short of the rights of full members to hold office or vote at meetings. If the restricted members' subscriptions:
you may accept that they are not trading income.
Normally no liability arises where a member pays for their
personal guests, even though these may be
described as 'visitors' fees'. A personal guest would be one where
the member bore the costs of the guest visiting the club. A
‘guest’ who had to pay their own way should be treated
as any other ‘visitor’ - the income arising should be
brought into account in computing the club’s Case I Schedule
D profit.
Many clubs allow visitors or temporary members to use their
facilities on payment of a commercial fee. You should treat such
receipts as taxable trading income of the club - see
BIM24225 to BIM24240. This applies both
to individuals who simply arrive at a club to use its facilities on
a casual basis and to groups who may book such use in advance.
The description of such visitors as 'temporary' members of
the club (for example, temporary membership to a golf club may form
part of a holiday package) does not prevent receipts from being
taxable. Similar receipts from 'associate' members for their use of
the club's facilities is also trading income unless it can be shown
that their rights are equivalent to those of full members. (These
rights (might) include the right to vote at meetings, participate
in club activities and generally to exercise control over the
running of the club).
The expenses incurred in earning the fee income are
deductible in computing assessable profits. The deduction extends
to the appropriate proportion of the club’s overhead
expenses. For example, in the case of golf clubs, a reasonable
proportion of the course overheads may be deducted.
You should also quantify other incidental trading receipts,
such as non-member catering income, in worthwhile cases.
