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VAT and Supporting People Supplies

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

VAT zero rate for reading material

Charities and their advisers will be aware of the favourable zero rate VAT regime for reading material that has applied in the UK since the days of purchase tax.  They will also know of the seemingly illogical stance of HMRC that this relief only applies to old fashioned physical print formats and not to modern digital formats.  This has been a bone of contention for many years, and one conglomerate, News Corp UK & Ireland, has litigated over the issue to seek zero rating on the digital equivalents of their well-known newspapers. Read more by clicking here

VAT on matchmaking

Art or science?

If you want to research what actually happens in certain walks of life, VAT tribunal reports are a treasure trove. We learn about the purpose and activities behind pilates (Hocking [2014] UKFTT 1034), belly dancing (Cheruvier [2014] UKFTT 7), fortune telling (Indian Palmist (2003) VAT Decision 18397), and several more.

To this, and the others, we can add matchmaking services, brought to us by the case of Gray & Farrar International LLP [2019] UKFTT 684. 

That’s a grand sounding name, but, in reality, one person is responsible for providing the service, namely Claire Sweetingham, assisted by a small team. So, what kind of person is she and what is the service?

To read more (click here)

Whether a structure is an Annexe – Yeshivas Lubavitch Manchester case

I have previously commented on the Yeshivas Lubavitch Manchester tribunal case in the context of whether a proposed use of a building is a ‘relevant charitable purpose’. However, the case also concerned whether the works in question created an ‘annexe’ as distinct from an ‘extension’ to an existing structure. For the zero rate to apply to the works, this condition also needed to be met. The First tier Tribunal decided that it had been, contrary to HMRC’s views. The case therefore provides interesting insight into HMRC’s attitude to various aspects of such cases. To read more: click here

Eynsham Cricket Club VAT case – Another update

I wrote a commentary on the curious case of the CASC that claimed it was a charity in order to benefit from charitable VAT relief on new building works.  That related to the First tier Tribunal decision in Eynsham Cricket Club.  This has now returned to the courts in the form of an Upper Tribunal decision (UKUT0286).  The tortuous result is that the Club lost its appeal.  The interesting aspect is the route to that result. To read more…click here

Defining ‘Protection’ for the purposes of the VAT Welfare Exemption

This commentary focuses on one of the defining planks of the ‘welfare’ exemption which applies (amongst others) to charities.  The relevant provision relates to the ‘care or protection’ of children or young persons.  The review is prompted by the Tribunal decision in Lilias Graham Trust (TC07346).  Whereas the facts will be special to that charity (which has an unusual activity) the case makes some points which have a wider resonance. To read more, click here

Relevant Charitable Purpose for Nurseries? Review of the Yeshivas Lubavitch Manchester VAT case

In the wake of the court decisions in Longridge and Wakefield College we were wondering where the newly stricter conditions for defining ‘relevant charitable purpose’ left children’s care charities that had relied on the ancient precedents of Yarburgh and St Paul’s.  HMRC did not withdraw their policy to the effect that such ‘creche’ charities could be regarded as carrying out relevant charitable purposes despite making charges, but this no longer appeared to align with the recent decisions, and the basic tenet on which they were based, the concept of ‘predominant concern’, had been clearly superseded.  We awaited the next step… read more: click here

Mydibel and tax adjustments

The wider application of Sch 10 ‘clawback’ provisions to lease back financing deals.

As you read this piece the UK may already have left the EU, though it hadn’t at the time of writing. The accepted position is that all CJEU decisions pre-dating that departure date become binding decisions at Supreme Court level. We therefore need to pay heed to the dates of decisions. The CJEU’s decision in Mydibel (Case C-201/18) makes the cut, so to speak, and would have done so by two days even had the UK left as planned on 29 March. It is therefore binding precedent.

And it has something direct to tell us… read more here

Judicial review challenge in Vacation Rentals

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 ([2018] 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.

To read more:

Click here