Including VAT Chatter Newsletter
The litigation in the case of Balhousie has reached its conclusion with a Supreme Court decision (2021 UKSC 11). This concerns the application of the ‘clawback’ provisions that apply where the construction or purchase of a new building was made on a zero rated basis, and the building is later disposed of, within the first ten years of life. I have already reported on this case at its First Tier and Upper Tribunal stages here. However, I will start this commentary by explaining its relevance to charities. More info: click here
A decision of the Upper Tribunal (Westow Cricket Club v HMRC) appears, at first sight, to having nothing to do with charities, but it has a passing interest, since it refers to a CASC and a case (not the first) in which a CASC mistook itself for a charity.
Westow Cricket Club (a CASC) issued a….. (to read more, click below) https://www.charitytaxgroup.org.uk/commentary/reasonable-excuse-relevant-charitable-purpose-vat-relief/
This commentary arises from the decision of the CJEU in the case of Kaplan (C-77/19). The decision precedes the end of the Transition Period, and is thus binding precedent, save to the extent that this can be overridden by senior courts of the UK. This means, essentially, that the decision sets the applicable rule unless and until it is specifically revoked by a senior court or by a change in legislation.
The case involved an international supplies dimension (which the CJEU did not answer, since its answer to the other point rendered it otiose), and one that has application to entirely UK sited entities. The latter question fell into two parts, as follows: click here for more
Charities sometimes provide payroll services to persons with disabilities, to allow these people to employ, and remunerate, a carer. The provision of care services by a charity would be exempt from VAT. Where the only service provided is of running the payroll service, the charity will argue that that service is exempt, owing to the special needs of the service recipient and that person’s incapacity to deal with the arrangements for employing the carer.
Following an unsatisfactory piece of litigation,… read more by clicking here
The First tier Tribunal decision in the case of Swanage Sea Rowing Club (TC07904) provides further useful insights into the VAT position where a zero rate certificate is used in connection with a new construction project (which in this case was of a boat house).
The decision … read more by clicking here
This commentary relates to the case of Birmingham YMCA (and others), about which I wrote a previous commentary in September 2018, and in respect of which an appeal has been heard at the Upper Tribunal (UKUT0143). From the VAT technical point of view, this is a case about the application of VAT exemption to welfare services. Where a decision is made by the First tier Tribunal, and an appeal against that fails, it is usually a simple case of upholding the arguments that had been accepted by the first judge. Whereas the Upper Tribunal, in this case, dismissed the charities’ appeals, it is worth pausing to consider why, and what this tells us, in addition to the decisions by the first judge. To read more – click here
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