Including VAT Chatter Newsletter
A subject that never seems to go away is the issue of how much VAT can be claimed on charity purchases. Quite apart from the difficulty of determining whether, say, an activity is business or not, or exempt rather than zero rated, which can drastically affect the level of recovery, there is the issue of the approach to apportionment of the related costs… Read more, click: here
It is not easy to interpret the impact that the Upper Tribunal decision in HMRC v Greenisland FC (UKUT 440) will make on HMRC policy, on other tribunal decisions, or on decisions that charities themselves will make. This alone appears to make this decision far from satisfactory.
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Judicial review success in a VAT case reveals HMRC’s surprising willingness to resile from its guidance.
One can almost hear the sound of rejoicing at the news that a judicial review action concerning VAT, and effective misdirection by HMRC, has met with success. It takes a brave litigant to embark on such a project, in which the prognosis is almost never good. But Vacation Rentals (UK) Ltd went to the Upper Tribunal ( UKUT 383), in which Judges Fancourt and Herrington supported their case. Their bravery may yet prove unrewarded if HMRC appeals successfully, but we are up and running with a good result that will stiffen taxpayers’ resolve in similar cases.
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Churches and temples are some of the most frequent benefiters from the VAT relief that applies to charity annexes to be used for relevant charitable purposes. They often erect new structures, but these are, for convenience or economy, commonly attached and linked to an existing building, rather than being physically separate. But it is far from straightforward to determine when such a development qualifies as an annexe, as distinct from simple extension or enlargement (which are not relieved). To read more, click here
Four English YMCAs have come together to appeal a decision on the VAT treatment of their funding from local authorities under the Supporting People scheme. Unfortunately, they have lost in the First Tier Tribunal (YMCA Birmingham & Ors v Revenue & Customs  UKFTT 458). It is reasonable to assume that other YMCAs, and similar bodies, will feel the effects of the decision.
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Although the decision of the First tier Tribunal in this case (Loughborough Students Union & Ors v HMRC  UKFTT 357 (TC)) seems to relate to the specific world of students unions, and was decided very much on the facts pertaining to such an establishment, nevertheless some general points for the wider charitable world appear to emerge and can be used with caution.
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