VAT: stuck in a bunker

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By Graham Elliott

HM Revenue & Customs (HMRC) finds itself stuck in a bunker. There are two ways in which this might be true. It could be holed up in an underground shelter awaiting the same fate as befell Hitler (and at risk of sliding into similar insanity) or its little round ball could be in a sand pit, defying each attempt to be clubbed onto the green. In HMRC’s case, both of these are true.

Its attempt to defend its increasingly doomed interpretation of the EU VAT rules for non-profit sporting bodies, a battle waged now since at least 2008 when it lost round one in the Canterbury Hockey Club case, has reached a point where even it must think that further resistance is futile. This arises in the recent decision by the Court of Justice of the European Union (CJEU) in the case of Bridport & West Dorset Golf Club. This case related to whether members’ sports clubs were able to treat charges made to non-members as being exempt in the same way that they treated supplies to members. The UK VAT legislation specifically forbids this treatment, but the case was based on UK legislation’s apparent incompatibility with the over-arching EU VAT law. The CJEU issued a decision on 19 December 2013 to the firm effect that the UK law was incompatible with EU law and that the supplies to non-members ought to be exempt…

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