North of England Zoological Society v Commissioners of Customs and Excise
| Jurisdiction | UK Non-devolved |
| Judgment Date | 04 October 1999 |
| Date | 04 October 1999 |
| Court | Value Added Tax Tribunal |
VAT Tribunal
The following cases were referred to in the decision:
Becker v Finanzamt Münster-Innenstadt (Case 8/81) [1982] ECR 53
C & E Commrs v Civil Service Motoring AssociationVAT[1998] BVC 21
C & E Commrs v Morrish VAT[1998] BVC 378
EC Commission v Netherlands (Case 235/85) [1987] ECR 1471
International Students House VAT(LON/95/3142) No. 14,420; [1996] BVC 2975
Lubbock Fine & Co v C & E Commrs VAT(Case C-63/92) [1993] ECR I-6665; [1993] BVC 287
North of England Zoological Society v Chester Rural District CouncilUNKUNK[1959] 3 All ER 116; [1958] 3 All ER 535
Sparekassernes Datacenter (SDC) v Skatteministeriet VAT(Case C-2/95) [1997] BVC 509
Stichting Uitvoering Financiële Acties (SUFA) v Staatssecretaris van Financiën VAT(Case 348/87) [1989] ECR 1737; [1991] BVC 102
Exemption - Zoo - Charitable body - Admission charge for entry - Whether charge consideration for provision of education - Whether supplies exempt - Value Added Tax Act 1994 schedule 9 group 6Value Added Tax Act 1994, Sch. 9, Grp. 6, item 1; Directive 77/388, the sixth VAT directive,eu-directive 77/388 article 13(A)(1)art. 13(A)(1)(i);notice 701/30/97Notice 701/30/97.
The issue was whether the admission charge for entry to Chester Zoo was exempt, as being the provision by an eligible body of education.
The appellant, a non-profit making charitable trust, owned and operated Chester Zoo. It was the representative member of a VAT group which also included a trading company supplying catering, sales and rides to the public. According to the appellant's mission statement, its role was to "support and promote conservation by breeding rare and endangered animals, by excellent animal welfare, high quality public service, recreation, education and science". The zoo operated an education division which employed six persons on full-time education work, assisted by 119 volunteers who helped when visitor numbers so required, but who were unavailable on a day-to-day basis. For certain of the activities in which the volunteers were involved an additional charge was made. The zoo took seriously what it saw as a task of educating and informing the public about animals, plant diversity and the need for conservation. This took a number of forms, including identification signs, guides and information packs, and through contact between members of the public, zoo staff and the volunteers. In 1958, the appellant brought an action in for the court to determine whether, for the purpose of the Rating and Valuation Act 1955, the society's main objects were "concerned with the advancement of religion, education or social welfare". The Court of Appeal held that it conducted the zoo "not as a place as amusement, or as a show place but, by and large, as an educational or as a scientific and educational undertaking". Until 1994, the admission charge which the appellant made to the public was standard-rated. However, on 11 November 1994 its accountants wrote to the commissioners seeking to persuade them that the admission charge was the consideration for the exempt supply of education. Customs ruled that, while it was accepted that the appellant was an eligible body for the purpose of Value Added Tax Act 1994 schedule 9 group 6Value Added Tax Act 1994, Sch. 9, Grp. 6, and that where a single special rate charge was made which included admission and some form of structured teaching session exemption applied, the standard admission charge for entry was standard-rated.
The appellant contended that the word "education", which was not defined in UK or European legislation, was to be given its ordinary meaning which was to be found in the 1958 judgment of the Court of Appeal. There, the Court of Appeal said that for an object to be educational there was no requirement of structured or formal courses. It was only necessary that education should broaden the mind. In any event, what was provided fell within Customs' definition in notice 701/30/97Notice 701/30/97 as being "a course, class or lesson of instruction or study in any subject whether or not normally taught in schools, colleges or universities and regardless of where and when it takes place".
The commissioners contended that, while a visit to the zoo had an educative value not every supply of admission was in fact and law a supply of education for VAT purposes. This was borne out by the fact that where educational activities were provided by the appellant a charge over and above the admission charge was made.
Held, dismissing the taxpayer's appeal:
1. The earlier case was decided in a particular rating context and could not be construed as an indication that where VAT was concerned the appellant was supplying education.
2. The training of its education volunteers involved education and had an educational content but this did not necessarily mean that visitors who made contact with them received supplies of education from the appellant.
3. The fact that a key element of the appellant's mission was to support and promote conservation by education and science, and that a visitor might know more about animals and conservation at the end of a visit than at the beginning, was not determinative of the issue, since a visitor's experience depended on his intentions and expectations.
4. The appellant was supplying recreation and not education.
[The tribunal set out the facts summarised above and continued as follows.]
Miss Sharp [for the appellant] opened her submissions by observing that "education" is defined neither in the UK legislation nor in the EC sixth directive [Directive 77/388]. Consequently, she submitted, it should be given its ordinary meaning. Such meaning, she maintained, was to be found in the judgments of the Court of Appeal in the Society's 1958 case where the court was required to decide whether, on a true construction of section 8 subsec-or-para (1)s. 8(1)(a) of the Rating and Valuation (Miscellaneous Provisions) Act 1955, the Society was an organisation which was not established or conducted for profit, and whose main objects were charitable or were otherwise concerned with the advancement of religion, education or social welfare. It held that the main objects of the Society, as set out in its Memorandum of Association, were charitable objects or, if they were not strictly charitable, they were "otherwise" concerned with the advancement of education. (The said s. 8(1)(a) gave relief to any hereditament occupied for the purposes of an organisation which was not established or conducted for profit and "whose main objects are charitable or are otherwise concerned with the advancement of religion, education or social welfare").
In his judgment in the Society's 1958 case [North of England Zoological Society v Chester Rural District CouncilUNK[1958] 3 All ER 116], Lord Evershed MR said (at p. 121):
I conclude, therefore, as did the learned judge [at first instance], that the answer to the question, "What are the main objects of this society?", is to be found from reading para. (a), para. (b) and para. (c) of cl. 3 of the memorandum [of the Memorandum of Association] with the assistance of the evidence, and that that material makes good the proposition which [Mr Willis] counsel for the society put in the forefront of his case, namely, that the society has conducted and conducts this zoo, not as a place of amusement or as a show place, but, by and large, as an educational or as a scientific and educational undertaking.
Paragraphs 3(a), (b) and (c) of the Society's Memorandum of Association remain in form identical to that considered by the Court of Appeal in 1959 and read as follows:
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(a) To acquire and take over as a going concern and conduct as a scientific and educational undertaking the business heretofore carried on as the Chester Zoological Gardens, Upton-by-Chester, by Chester Zoological Gardens Ltd, together with or any part of the real and personal property and assets of the company used in connection with that business or belonging thereto.
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(b) To promote, facilitate and encourage the study of biology, zoology and animal physiology, aviculture, aquaria, ichthyology, entomology, botany and horticulture and all kindred sciences and to foster and develop among the people an interest in and knowledge of animal life.
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(c) To establish, equip, and carry on, and develop zoological parks or gardens and living zoological collections at such places as the society shall determine.
In his judgment at first instance in the Society's 1958 case, reported at [1959] 3 All ER 535, the judge, Vaisey J, referred to the judgment of Farwell J in In Re LopesELR[1931] 2 Ch 130, which case raised the question whether, under a gift in a will, the Zoological Society of London was a charitable body so that a gift in its favour would be a charitable gift. At p. 135 Farwell J said:
Its [the Zoological Society of London's] first object is "the advancement of zoology and animal physiology." That is clearly educational, for the advancement of scientific knowledge, and therefore charitable …
In the second place, I think that the introduction here of non-indigenous animals, exhibited under proper conditions, is distinctly an educational object. It must widen the mind and outlook of every one to see, in the flesh, animals now becoming scarce in many parts of the world, which otherwise they might not see at all. Taking a broad view of the Society's objects I am satisfied that they are charitable, on the ground that they are for the advancement of education.
Having agreed with that passage, but observed that "its language might be applied more widely than is required for the decision in this case", Lord Evershed continued his judgment in the Society's 1958 case, (at p. 122):
…I think it is true to say that a zoo with objects such as those in para. (a), para. (b) and para. (c) of cl. 3 of the memorandum in the present...
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