In Marlow Rowing Club v HMRC [2018] TC 6803, a tribunal held that the club did not have a reasonable excuse when it incorrectly issued a certificate for zero-rating a building for a charitable purpose. it had not taken adequate steps to contact HMRC over a decision that it knew was contrary to HMRC policy.

This decision reversed on appeal to the Upper Tribunal.

  • The rowing club constructed a building to be used by itself and other sports clubs. It also included a gym that offered membership to non-club members.
  • The club issued a certificate that the building was to be used for charitable purposes within the meaning of Value Added Tax Act 1994 Sch 8 Group 5.
  • HMRC found that the certificate was issued incorrectly.
  • The club claimed that it had a Reasonable Excuse: it had consulted extensively from lawyers and accountants, and had acted on their advice.
  • At the time of the issue the Court of Appeal case Longridge [2016] EWCA Civ 930 on a similar matter was pending and the club was aware that issuing the certificate was contrary to HMRC policy.

On appeal to the tribunal, the FTT confirmed that a reasonable excuse is what a reasonable business person would have done. The advice the club received had not been conclusive, the club should have asked HMRC for its view. If it disagreed with that view, it should have appealed, and asked for the appeal to be stayed until Longridge had been decided.

This case is Longridge [2016] EWCA Civ 930. Following that case, the club withdrew its appeal that the certificate was correctly issued and instead argued  


In areas where the law is complex or unclear, relying on professional advice can sometimes been held to be reasonable excuse. However, for VAT the problem remains that there is no defence of reliance on a third party. Hindsight is a wonderful thing, however a useful 


Marlow Rowing Club [2018] TC 6803