Marcus Webb Golf Professional
| Jurisdiction | UK Non-devolved |
| Judgment Date | 31 December 2009 |
| Neutral Citation | [2009] UKFTT 388 (TC) |
| Date | 31 December 2009 |
| Court | First-tier Tribunal (Tax Chamber) |
[2010] TC 00323
[2009] UKFTT 388 (TC)
Tribunal Judge John Avery Jones CBE (Chairman), Diana Wilson
B. J. Rice of BJ Rice & Associates, for the Appellant
Suzanne Lambert, counsel, instructed by the General Counsel and Solicitor to HM Revenue and Customs for the Respondents
Exemption - Tuition of a type taught in a school or university supplied by an employee - Whether exempt on the basis of the principle of fiscal neutrality - No - Appeal dismissed
Exemption - Education - Tuition of a type normally taught in a school or university supplied by an employee - Whether exempt on the basis of principle of fiscal neutrality - The issues were whether the appellant's claims for repayment of VAT were capped by the Value Added Tax Act 1994 section 80Value Added Tax Act 1994, s. 80 and whether supplies of tuition by an employee of the appellant qualified for exemption from VAT under item 2 of Value Added Tax Act 1994 schedule 9 group 6Sch. 9, Grp. 6 to the 1994 Act - The appellant was a partnership between Marcus Webb, his wife and a limited company, Marcus Webb Golf Professional Ltd - The appellant employed another golf professional to provide tuition on its behalf and the commissioners ruled that these supplies were standard-rated - The appellant contended that all tuition should be exempt whether carried out as an individual or as an employee of the company - Failure to allow exemption was, in the appellant's view, a breach of the Community principle of fiscal neutrality - The commissioners pointed to the words "given privately" in the sixth VAT directive (Directive 77/388), eu-directive 77/388 subsec-or-para A article 13art. 13(A)(1)(j) and contended that the words were correctly applied in UK law by Sch. 9, Grp. 6, item 2, which restricts exemption to the supply of private tuition in a subject ordinarily taught in a school or university by an individual teacher "acting independently of an employer" - Held, that the interpretation of the words "given privately" in Haderer v Finanzamt Wilmersdorf ECAS (Case C-445/05) [2010] BVC 306 was binding on the tribunal - The tuition must not only be private in the sense that it must be between the teacher and one or more pupils, it must also be supplied by a self-employed teacher - There was no breach of the principle of fiscal neutrality - The UK law correctly transposed the sixth directive - The commissioners were entitled to rely on the three-year cap and to treat tuition supplied by the appellant's employee as standard-rated - Appeal dismissed.
1. Marcus Webb Golf Professional (a partnership) appeals against a decision dated 31 January 2008 that repayment claims for the accounting period 06/03 are capped by Value Added Tax Act 1994 section 80 subsec-or-para 4s. 80(4) VAT Act 1994, and secondly that supplies by Mr Richard West do not qualify for exemption under item 2 ofValue Added Tax Act 1994 schedule 9 group 6 Group 6 of Schedule 9 to the VAT Act 1994. The Appellant was represented by Mr B J Rice and the Respondents ("HMRC") by Miss Suzanne Lambert.
2. Item 2 of Group 6 exempts:
the supply of private tuition, in a subject ordinarily taught in a school or university, by an individual teacher acting independently of an employer.
Item 2 was no doubt intended to reflect eu-directive 77/388 subsec-or-para A article 13art 13A(1)(j) of the Sixth Directive (now eu-directive 2006/112 article 132art 132(j) of the Recast VAT Directive):
(j) tuition given privately by teachers and covering school or university education.
3. The facts are not in dispute:
(2) The Appellant is a partnership ("the Partnership") between Mr Marcus Webb, his wife and Marcus Webb Golf Professional Limited ("the Company"). Mr and Mrs Webb are directors and employees of the Company.
(3) Mr Webb makes supplies both as a member of the Partnership, which are treated as exempt, and as a director of the Company, which HMRC have taxed and the Appellant claims are exempt.
(4) Mr Richard West is employed by the Appellant. He also provides golf tuition to his own clients on a self-employed basis at fees determined by him and invoiced on his own letterhead.
(5) Mr West also provides tuition to the Appellant's clients who come to the golf professional's shop or who are passed on to him by the Appellant. These are for fees published in the shop and are invoiced on the Appellant's letterhead. The Appellant claims that these are exempt.
4. Mr Rice, for the Appellant, contends that all tuition is exempt whether carried out as an individual or as an employee of the Company. The tuition provided is identical and on the principle of fiscal neutrality must be treated in the same way. Because domestic law does not implement the Directive correctly HMRC cannot rely on the three-year cap.
5. Miss Lambert for HMRC points to the words "given privately" in eu-directive 77/388 subsec-or-para A article 13art 13A(1)(j) of the Sixth Directive and, given the interpretation of these words in Haderer, Case C-455/05, contends that these words are correctly transposed into domestic law by the words "acting independently of an employer." She also points out that the same point has been decided in favour of HMRC in R & C Commrs v Empowerment Enterprises Ltd VAT[2007] BVC 878 by the Court of Session, which although not technically binding are highly persuasive given the need for VAT law to be harmonised throughout the UK.
6. It is common ground that art 13A exempts activities in the public interest, and that exemptions are to be interpreted strictly. As the ECJ said in Haderer:
16 As a preliminary point, it should be noted that Article 13A of the Sixth Directive relates to...
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Marcus Webb Golf Professional v Revenue and Customs Commissioners
...Act 1994 schedule 9 group 6Sch. 9, Grp. 6, item 2. This was an appeal by a partnership against a decision of the First-tier Tribunal ([2009] UKFTT 388 (TC); [2010] TC 00323) raising the question whether supplies of golfing tuition made on behalf of the partnership by an individual (W) quali......
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Tranter (t/a Dynamic Yoga)
...student might otherwise be taught at school or university." [50]The appellant referred us to the case of Marcus Webb Golf ProfessionalTAX[2010] TC 00323 which concerned private tuition by a golf coach. But we note it did not deal with whether golf tuition was ordinarily taught in schools an......