Highland High Life scheme loses VAT appeal.

The Highland Council has expressed its disappointment at losing an appeal at the Court of Session this week resulting in a £140,000 VAT bill for its High Life leisure scheme.

Introduced in May 2000, High Life provides affordable access to leisure facilities encouraging healthy lifestyles to around  28,000 card holders across 20 centres throughout the Highlands.

Ian Murray, Highland Council’s Head of Community Learning and Leisure said: “The effect for the Council’s Education, Culture and Sport Service is that we now owe £140k in VAT that we didn’t think we should.  It may mean a rethink of a scheme of which we are very proud as it particularly concentrates on encouraging use of leisure facilities by families who are financially disadvantaged.

“We are disappointed at having to pay this money. We have yet to properly digest the full ruling and once we know the details we may be able to amend the scheme so the customer does not notice as we are determined not to loose it’s low cost simplicity.

“We are convinced the scheme is one of the best in the country as it opens up leisure facilities for families who are just above the benefits line and normally don’t get help from anywhere else.”

The basic disagreement between the Council and Customs and Excise arose in how VAT is accounted for on income at Leisure Centres. Before High Life, individual visits incurred VAT on activities unless they were for coaching or other educational purposes.  Once the all inclusive monthly charge was introduced, the Council continued to pay an appropriate VAT proportion of each fee depending on the actual use made by customers.  However, Customs argued successfully that having moved to a single payment, VAT should be charged on the whole fee.

Using smart card technology, High Life targets people who have tended to be excluded from sport and leisure because of economic or social circumstances. The card removes the stigma of the need for repeated proof of being in receipt of state benefits for those wishing to take part at concessionary rates. High Life offers regular, low cost opportunities for families on incomes just above the state benefit level and it enables regular users to receive discounted rates (through the ability to pay an “all inclusive” monthly direct debit).

Full details of the scheme are available on the Council’s website at: /leisure/sportsfacilities/highlife/default.htm