A COURT ruling in Scotland that ends VAT exemption on membership fees for leisure centres run by trusts could have serious implications for Bridport.

The court ruling means that trusts may face a £20million retrospective tax bill.

As things stood VAT was not charged on all or most of the membership fees for leisure centres run by trusts but the court ruling says VAT must now be paid on membership fees covering non sporting facilities such as saunas and steam rooms.

Nick Neale, CEO of Bridport and West Dorset Sports Trust said: "Recent decisions on VAT by HM Revenue and Customs could have potentially serious implications for the services Bridport & West Dorset Sports Trust provides for the local community.

"If we were required to apply VAT to membership fees at Bridport Leisure Centre, we could see a significant drop in visitor numbers, which would be at odds with the government's vision of increasing participation and tackling rising obesity problems.

"The Sport and Recreation Trusts Association, SpoRTA, which represents 115 leisure and cultural trusts across the UK, is seeking independent expert advice from PricewaterhouseCoopers (PwC) on behalf of its members, and hopes to meet with HM Revenue and Customs to discuss this issue."

Craig McAteer, Chair of SpoRTA said: "SpoRTA members manage more than 550 leisure centres on behalf of local authorities across the UK, serving more than 195 million visitors every year. Any move to apply VAT to membership fees could significantly affect participation rates among our customers from lower socio-economic groups, which could ultimately damage the government's ambition of increasing participation, encouraging healthier lifestyles and tackling rising obesity."