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
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
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
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recent decisions, and the basic tenet on which they were based, the concept of ‘predominant concern’, had been clearly superseded.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
The Court of Justice of the EU (CJEU) has given what may prove to be the last binding decision on the UK regarding a case the UK courts have referred… read more: click here
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 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.
To read more:
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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A recent tribunal case illustrates the circularity in the operation of the anti-avoidance in Sch 10 which restricts the option to tax a property. The rules should be abolished.
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