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
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
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  UKFTT 1034), belly dancing (Cheruvier  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  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)
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
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