Marcus Webb Golf Professional (A Firm) v HM Revenue and Customs

Domestic VAT legislation implementing a directive should be construed in conformity with it. The exemption for private tuition in Value Added Tax Act 1994 and Article 13(A)(1)(j) uses independent EU-law concepts. Exemptions are strictly interpreted as exceptions to general VAT liability, while preserving their purpose and fiscal neutrality.

Tuition is not supplied privately where a teacher provides it under contractual arrangements with, and on behalf of, another entity. The teacher’s self-employed status or separate client list does not alter that conclusion. The Court applied Haderer and Eulitz and dismissed the renewed application for permission to appeal.

Marcus Webb Golf Professional (a firm) sought permission to appeal from the Upper Tribunal (Tax and Chancery Chamber), which had affirmed the First-tier Tribunal’s decision that MW was liable to account for VAT on golfing tuition supplied by its employee, Mr Richard West, to MW’s clients.

The case proceeded on findings that bookings were made through MW, lessons were undertaken on MW’s behalf, and relevant fees were publicised and invoiced by MW. HM Revenue and Customs accepted that golfing tuition was the relevant type of tuition. The central issue was whether the supplies were made privately under item 2 of Group 6 of Schedule 9 to the Value Added Tax Act 1994, read with Article 13(A)(1)(j) of the Sixth VAT Directive, and whether fiscal neutrality required a different result.

The renewed application for permission to appeal was dismissed. The Court proceeded on the factual findings below and held that the relevant tuition was supplied by Mr West on behalf of MW, notwithstanding his self-employed work and separate client list.

1. The domestic exemption in item 2 of Group 6 of Schedule 9 to the Value Added Tax Act 1994 was intended to give effect to Article 13(A)(1)(j) of the Sixth VAT Directive. Domestic legislation should therefore be construed in conformity with the directive.
2. The principles stated in Haderer and Eulitz governed the construction of the exemption. VAT exemptions are independent concepts of EU law and must be strictly interpreted because they are exceptions to the general rule that VAT is charged on supplies for consideration. That approach must nevertheless respect the objectives of the exemption and fiscal neutrality.
3. Applying those authorities, tuition is not given privately where it is supplied under contractual arrangements with, and on behalf of, another entity rather than on the tutor’s own account. The relevant supplies to MW’s clients therefore fell outside the exemption.
4. The Court was bound to apply the law established in the decisions of the Court of Justice. The decision in Skatteverket v PFC Clinic AB, which did not concern Article 13(A)(1)(j), provided no basis for doubting Haderer or Eulitz. The proposed appeal consequently had no realistic prospect of success, and the application was dismissed.

• Court of Appeal (Civil Division) [2013] EWCA Civ 1225: dismissed the renewed application for permission to appeal.
• Upper Tribunal (Tax and Chancery Chamber): affirmed the First-tier Tribunal and held that MW was liable to account for VAT on the relevant tuition supplies.
• First-tier Tribunal: held that the supplies did not fall within the private-tuition exemption.