Including VAT Chatter Newsletter
HMRC has met the concern expressed at the outcome of the case of Colchester Institute in the most constructive manner available to them. They are to be congratulated on that.
The appellant’s case was based on the idea that funding from SFA and ESF amounted to exempt consideration for a supply of education. The Upper Tribunal agreed to this. For the appellant to win the case overall it needed to win on a second point, but was unsuccessful. The decision therefore went in HMRC’s favour, despite HMRC’s defeat on the funding liability issue. As the appellant withdrew from the process, HMRC was unable to appeal the point on which the Upper Tribunal had been against them. …..click HERE to read more
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
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