Exemption of Sporting Supplies

The Upper Tribunal heard an appeal by St Andrew’s College, Bradfield, against The First-Tier Tribunals decision to classify supplies of sports services made by the college’s subsidiary as taxable, as opposed to exempt for VAT purposes.

 

The Appellant in this case was a college who was the representative member of a VAT group consisting of two wholly owned subsidiaries, Bradfield College Enterprises Ltd and Bradfield College Developments Ltd. Both of these subsidiaries supplied sports services which were treated as being supplied by the representative member of the VAT group with VAT having been accounted for on these services at the standard rate. The college, however, argued that the supplies made were exempt from VAT on the basis that they were made “by an eligible body and were closely linked with and essential to sport or physical education”.

 

For these purposes, an eligible body is a non-profit making body that is precluded from distributing any profit it makes and is not subject to commercial influence. Despite the supplies being treated as if they were made by the representative member of the VAT group, who was an eligible body for these purposes, The Upper Tribunal determined that as the subsidiaries who made the supplies were not precluded from distributing profits to the representative member, they did not qualify as an eligible body themselves and therefore were required to charge VAT on these supplies. As a result, The Upper Tribunal rejected the taxpayers appeal.

 

If you or your client make supplies of this nature, it is vitally important to confirm the VAT liability of these supplies at the earliest opportunity to prevent the possibility of HMRC raising assessments for incorrect VAT treatment further down the line. To discuss these issues with one of our experienced consultants, please call our free VAT helpline.

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