In Eynsham Cricket Club v HMRC [2019] UKUT 0286, the Upper Tribunal (UT) found that although it was registered as a Community Amateur Sports Club (CASC) it was not a charity and so its sports pavilion could not be zero-rated.
Eynsham Cricket Club (ECC) is a community cricket club registered as Community Amateur Sports Club (CASC).
- ECC’s previous cricket pavilion was destroyed by fire and the club engaged a contractor to build a new facility.
- The ECC believed that the new pavilion should be zero-rated on the grounds that it was a “relevant charitable purpose” building.
- VAT legislation defines “relevant charitable purposes” as established for use by a “charity”. It goes on to define a “charity” as a body of persons or trust that is established for charitable purposes “only”.
- HMRC argued that the ECC did not meet the VAT legislation's definition of charity. A CASC is specifically excluded from being a “charity” by charity legislation, therefore ECC was not a charity.
- The ECC appealed HMRC’s decision to the First Tier Tribunal (FTT).
The FTT had found that:
- A CASC can be regarded as a charity for VAT purposes, as long as it would otherwise be charitable.
- ECC’s objections, in particular to providing social facilities to the local residents, were not charitable.
The FTT dismissed the appeal. ECC appealed to the Upper Tribunal (UT).
The UT found that the matter was one of statutory interpretation.
- A body registered CASC can’t be recognised as a charity for VAT purposes.
- As the ECC was not a charity so the construction of a sports pavilion could not be zero-rated.
Accordingly, ECC lost the appeal, again.
Comment
The UT develved back in time: as far back as Queen Anne, to arrive at this decision. Unless appealed this is likely to have wide-ranging effects. CASCs planning construction projects should be aware that on the basis of this decision, VAT reliefs for charities are likely to be unattainable.
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Land & Property: Relevant residential & relevant charitable purpose
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