HMRC windfall good news for Derry'sTemplemore Sports Complex

A Derry City and Strabane District Council (DCSDC) HMRC (Revenue and Customs) windfall will help to finance the redevelopment of two leisure centres in its area.

Derry’s Templemore Sports Complex and Strabane’s Riversdale Leisure Centre are set to benefit from just over five million pounds which Council has recouped from HMRC.

The HMRC rebate resulted from the settlement of a legal case involving all local authorities in Britain.

A spokesperson for DCSDC confirmed agreement was reached last year with HMRC on settlement of Council's Leisure VAT claim.

The case centred on the VAT treatment of income from leisure and sporting activities, which were being classed as a business activity and therefore treated as subject to VAT at the standard rate - now 20%.

The spokesperson explained the councils had argued these activities were non-Business activities; they eventually won the case against HMRC and were able to reclaim VAT paid over to HMRC over a number of years dating back to 2006/2007.

The precise amount repaid was itemised under the heading ‘Exceptional Item - Leisure VAT Appeal’ in a recent DCSDC financial report.

Derry's council seeking public's views on plans for new multi-million pound facility to replace the Templemore Sports Complex

The report stated: “Agreement has now been reached with HMRC on settlement of Council’s VAT claim up to March 31, 2024 with a sum of £4,085,208 received plus a further sum of £445,508 representing statutory interest on the repayable amount.”

This amounts to a total of £5,017,374.

The report continued: “A further claim for the year 2024/25 in the sum of £486,658 has now also been submitted and Council awaits settlement. As agreed in Council’s Capital Strategy 2024/25, all receipts with the back-dated element of the leisure VAT claim are to be applied towards Council’s strategic leisure projects and the funds have therefore been transferred to Council’s Capital Fund in this regard.”

Confirming the amounts, the DCSDC spokesperson added: “The development of a new strategic leisure facility at Templemore is a key capital priority for Council alongside a new strategic leisure facility for Strabane which represents Council’s contribution towards the Strabane Town Centre Regeneration Project element of the City Deal.

“As agreed by Council during the 2024/25 rates process, the funds generated through the leisure VAT claim have been designated towards these Council's strategic leisure projects in Templemore and Strabane and will form a component of the wider financing strategy for these two critical strategic projects.

“The total funds relating to back-dated leisure VAT claim have been transferred to the Council's Capital Fund, as previously agreed.”