Freemasonry Exempt from VAT?

The United Grand Lodge of England (UGLE) is a non-profit organisation whose aims include “draw[ing] together those practising Freemasonry”. The activities undertaken by the organisation in the course of achieving these aims were defined by the organisation as of a ‘philosophical, philanthropic or civic nature’ and therefore exempt from UK VAT.

Both HMRC and the First-tier Tribunal rejected this VAT treatment on the basis that, although some of the organisations aims would allow for exemption, other main aims did not fall within the confines of the exemption.

The First-tier Tribunal attempted to determine whether UGLE’s qualifying aims were of such a magnitude that the other aims of the organisation that did not qualify for exemption were ancillary to those that satisfied the exemption criteria. If this was the case, the qualifying aims could be considered the main aims and exemption would therefore be allowable however, this was not the view of The First-Tier Tribunal.

The case was once again appealed by UGLE and, upon hearing the case, the Upper Tribunal sided with the First-tier Tribunal due to a large proportion of UGLE’s activities not being suitable for exemption as activities of a ‘philosophical, philanthropic or civic nature’.

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