The British Association for Shooting & Conservation Ltd v Revenue and Customs

[2009] EWHC 399 (Ch)

Cited by 5 later cases5 positiveCites 13 authorities

Summary

VAT exemptions for services closely linked to sport require more than a general benefit to sporting participants. The services must be ancillary to participation and essential to the sport, assessed by asking whether they enhance the enjoyment or benefit of sport and whether an equivalent sporting experience could be obtained without them. Services need not be supplied directly to participants.

For exemptions based on civic or political aims, an organisation’s constitutional objects must be tested against its activities in practice. Where it has several objects, its main or primary object is material. A body whose principal purpose is representing members will not qualify merely because it also undertakes substantial public-spirited or political activities.

Factual background

The appellant, a national organisation representing sporting shooters, appealed on a point of law from the VAT and Duties Tribunal’s decision that subscription income, after allowing for zero-rated magazines and exempt insurance arrangements, was consideration for a standard-rated supply.

The Tribunal had treated the residual subscription income as relating to one supply. On appeal, the appellant sought to argue that the income should instead be dissected into separate supplies and that the relevant activities fell within the sport or civic/political exemptions in the Sixth Directive. The central issues were whether the new dissection argument was open on appeal and whether the Tribunal had applied the correct legal tests.

Held

  1. Appeal allowed and case remitted. The Tribunal had made errors of law in its treatment of the sport exemption, and the High Court could not be sure that the result would have been the same under the correct tests. The case was remitted for further consideration.
  2. It was not open to the appellant on this appeal to argue that the residual subscription income should be dissected into further supplies. That issue would have required further factual investigation and had not been advanced before the Tribunal. It could be raised in relation to a future disputed assessment.
  3. Under article 13A(1)(m) of the Sixth Directive, services need not be supplied directly to persons taking part in sport. Where they are supplied indirectly, the question is whether sporting participants are the true beneficiaries. Services are closely linked to sport only when ancillary to participation, meaning that they are a means of enhancing the enjoyment or benefit of the principal sporting service. The service must also be essential to the sport; being of great assistance is insufficient, and the availability of alternative means is relevant. The proper comparison is whether an equivalent sporting experience could be obtained without the service.
  4. The Tribunal had applied too restrictive a test by requiring a direct link with actual participation. It had also treated the essentiality requirement as an additional United Kingdom requirement and regarded the fact that shooters could belong to other organisations, or none, as irrelevant. Those were errors of law. The question whether the services were essential had not been expressly determined.
  5. For the civic or political exemption, an organisation’s aims are found primarily in its constitutional documents, tested against what it actually does. Its main or primary object is material where it has multiple aims. The Tribunal was entitled to find that representation of sporting shooters was BASC’s primary object, and that its conservation and other public-spirited activities were subordinate. There was no legal error in concluding that this primary object was neither civic nor political. Political activities do not necessarily establish political aims.

The court’s approach to earlier authorities

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Appellate history

High Court (Chancery Division): On appeal from the VAT and Duties Tribunal, the appeal was allowed and the case remitted for further consideration.

Key cases cited

13 authorities cited.

  • McDonald v Coys of Kensington [2004] EWCA Civ 47
  • Expert Witness Institute v Customs & Excise Commissioners [2002] STC 42
  • Canterbury Hockey Club v Revenue and Customs Commissioners [2008] STC 3351
  • PETROMEC INC PETRO-DEEP SOCIETA ARMAMENTO NAVI APPOGGIO SPA v PETROLEO BRASILEIRO SA [2006] 1 Lloyd's Rep 121
  • EC Commission v Germany [2002] STC 982
  • EC Commission v. France [2001] ECR I-249
  • Jones v MBNA International Bank 30 June 2000
  • Institute of the Motor Industry v Customs and Excise Commissioners [1998] STC 1219
  • Customs and Excise Commissioners v Madgett and Baldwin Joined cases C-308/96 and C-94/97
  • Stichting Uitvoering Financiële Acties v Staatssecretaris van Financiën Case 348/87
  • Game Conservancy Trust
  • Diagnostiko & Therapeftiko Kentro Athinon-Ygeia AE v Ipourgos Ikonomikon Case C-394/04 and C-395/04
  • Staatssecretaris van Financiën v Stichting Kinderopvang Enschede Case C-415/04

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Cases citing this case

5 later cases · 5 positive

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