In Marites Salabit v HMRC [2019] TC0675, the First Tier Tribunal (FTT) found that the operator of a social club bar was liable to register for VAT, despite making no profit on it.

  • Marites Salabit was asked to operate a social club bar at her local church, St Pius X Roman Catholic Church.
  • She employed staff, paid rent to the church, banked the proceeds in her personal bank account and this came to HMRC’s attention.
  • HMRC reached the conclusion that Salabit was operating the social club bar as a business in her own right, and she should have been registered for VAT in April 2014. HMRC assessed that VAT of £10,617 was due.
  • Ms Salabit did not believe she was running a business as she hardly made any profit. She considered herself a “manager of the social club” and therefore she thought she was not liable to register for VAT.
  • Ms Salabit appealed to the FTT.

The FTT concluded that Ms Salabit was running a business. She was liable to register for VAT on the basis that she retained profits herself and banked the takings into her personal bank account rather than a church account. All these pointed to her operating the social club bar as a business bar in her own right and not as a “manager”. The FTT dismissed the appeal.

Our guides

Registering for VAT (subscriber)
When do I need to register for VAT? When do I need to start charging VAT? What penalties might HMRC issue for late notification?

Appeals: VAT
The process of making a VAT appeal largely follows that of direct taxes, however, there are some differences.

Mutual trading, members clubs and community trades (subscriber)
This guide covers the taxation of mutual trading, members clubs, associations and community trades. It does not include Community Amateur Sports Clubs (CASCs) which are treated as charities.

External links

Marites Salabit v Revenue & Customs [2019] TC0675

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