A Highland rugby club is facing one of its toughest matches off the pitch, after the taxman appealed against the decision to quash a massive VAT bill.
Caithness Rugby FC was hit with a crushing bill for VAT after building their a new clubhouse at their ground in Thurso.
A tax tribunal found in the club’s favour in August after president Frank Stephen argued that the new hall was used by various community groups and not just the rugby team.
But now Her Majesty’s Revenue and Customs (HMRC) have issued notice of their intention to appeal against the decision.
If the appeal is successful the club could be hit with a tax bill running into tens of thousands of pounds, with HMRC arguing that the clubhouse should not be exempt from paying VAT.
The clubhouse has been planned by Caithness RFC for more than two decades.
Sports Scotland and other bodies stumped up most of the £300,000 cost, but club members worked hard to raise £95,000.
Mr Stephen pointed out that the clubhouse is used not just by club members, but the whole Caithness community.
A dance school and a choir meet there, as do a multiple sclerosis society and a community association for pre-school kids.
The North Highland Harriers athletes use the changing rooms, a bigband practices there and a disability sports association uses it for bowling nights.
Since Thurso Town hall was converted into a museum, the clubhouse has become the focus for many social and fundraising events.
Rugby fixtures are often moved to make way for prior bookings and club members pay the same rates as everyone else.
Tribunal judge, Dr Christopher Staker, ruled that the clubhouse was used as “a village hall or similarly” and its construction should have been zero-rated for VAT.
The clubhouse, he ruled, was a “community venture” and was run on a non-commercial basis.
The rugby club have declined to comment until the case is settled.
However, they confirmed that they have been served notice of the HMRC’s appeal.
A spokesman for the HMRC said that they “do not comment on identifiable taxpayers”.