Club Company (UK) Ltd
| Jurisdiction | UK Non-devolved |
| Judgment Date | 09 June 2014 |
| Neutral Citation | [2014] UKFTT 576 (TC) |
| Date | 09 June 2014 |
| Court | First-tier Tribunal (Tax Chamber) |
[2014] UKFTT 576 (TC)
Judge Lady Judith Mitting
Tim Brown of Counsel appeared for the Appellant
Sarabjit Singh, Counsel, instructed by the General Counsel and Solicitor to HM Revenue and Customs, appeared for the Respondents
Application to strike out - Does the appeal have a reasonable chance of succeeding - No - Should the appeal be stayed - No - Appeal struck out.
[1]The application before the Tribunal is that of HMRC to strike out the appeal by The Club Company (UK) Limited ("the Company") against the decision of HMRC that its supplies of sporting services should be taxable at the standard rate.
[2]The Principal VAT Directive 2006/112/EC ("the PVD"), from which the domestic provisions derive, provides at articles 132 and 133 as follows:
[1]Member States shall exempt the following transactions:
…
(m) the supply of certain services closely linked to sport or physical education by non-profit-making organisations to persons taking part in sport or physical education;
…
Member States may make the granting of bodies other than those governed by pubic law of each exemption provided for in points … (m) … of eu-directive 2006/112 subsec-or-para 1 article 132article 132(1) subject in each individual case to one or more of the following conditions:
(a) the bodies in question must not systematically aim to make a profit, and any surpluses nevertheless arising must not be distributed, but must be assigned to the continuance and improvement of the services supplied;
(b) those bodies must be managed and administered on an essentially voluntary basis by persons who have no direct or indirect interest, either themselves or through intermediaries, in the results of the activities concerned;
(c) those bodies must charge prices which are approved by the public authorities or which do not exceed such approved prices or, in respect of those services not subject to approval, prices lower than those charged for similar services by commercial enterprises subject to VAT;
(d) the exemption must not be likely to cause distortion of competition to the disadvantage of commercial enterprises subject to VAT …
[3]It was common ground that the Company is a proprietary club and is not thus a non-profit-making body. Its supplies are therefore not treated by HMRC as exempt.
[4]The Company's grounds of appeal are, in summary, that:
(2) The current application of VAT in the UK to providers of sporting services is in breach of EU legislation as it causes a distortion of trade in that it contravenes the PVD (eu-directive 2006/112 article 133article 133(d)).
(3) Support for this view is provided by the CJEU decision in the case of R & C Commrs v Bridport and West Dorset Golf Club LtdECAS (Case C-495/12) [2014] BVC 1 in which the Court ruled that:
•eu-directive 2006/112 article 134Article 134(b) of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax must be interpreted as not excluding from the exemption in eu-directive 2006/112 subsec-or-para 1 article 132article 132(1)(m) of that directive a supply of services consisting in the grant, by a non-profit-making body managing a golf course and offering a membership scheme, of the right to use that golf course to visiting non-members of that body.
•eu-directive 2006/112 article 133Article 133(d) of Directive 2006/112 must be interpreted as not allowing the Member States, in circumstances such as those in the main proceedings, to exclude from the exemption in eu-directive 2006/112 subsec-or-para 1 article 132article 132(1)(m) of that directive a supply of services consisting in the grant of the right to use the golf course managed by a non-profit-making body offering a membership scheme when that supply is provided to visiting non-members of that body.
(4) Annex III, paragraph 14 of the EC directive 2006/112 permits Member States to apply the reduced rate to sporting services. The Appellant considers that the reduced rate should be applied to all sporting services provided by proprietary clubs in the UK.
[5]The application by HMRC was brought under rule 8(3)(c) the Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules...
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