Sport In Desford v The Commissioners of Customs and Excise, V 18914
| Jurisdiction | UK Non-devolved |
| Judge | Ian E VELLINS |
| Judgment Date | 21 January 2005 |
| Respondent | The Commissioners of Customs and Excise |
| Appellant | Sport In Desford |
| Reference | V 18914 |
| Court | First-tier Tribunal (Tax Chamber) |
18914
ZERO–RATING — value added tax — supply of the construction of a Clubhouse — whether for use by a charity — whether for use as a village hall or similarly in providing social or recreational facilities for a local community — appeal allowed — VATA 1994 s.30 and Schedule 8 Group 5 Item 2(a) and Note 6(b)
MANCHESTER TRIBUNAL CENTRE
SPORT IN DESFORD Appellant
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Tribunal: Ian E Vellins (Chairman)
David Wenn
Sitting in public in Birmingham on 13 and 14 December 2004
Ms Sarah Dunn, counsel, for the Appellant
Mr James Puzey, counsel, instructed by the Solicitor’s office for HM Customs and Excise for the Respondents
© CROWN COPYRIGHT 2005
DECISION
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In this appeal, the Appellant, Sport in Desford, appeals against a decision of the Respondents, the Commissioners of Customs and Excise, contained in a letter dated 12 August 1999 to the effect that the supply to the Appellant of the construction of a Clubhouse was not a zero-rated supply because its use was not by a charity, and also because it was not intended for use as a village hall or similarly in providing social or recreational facilities for a local community. At the hearing of this appeal at Birmingham on 13 and 14 December 2004, the Appellant was represented by Ms Sarah Dunn, counsel and the Respondents were represented by Mr James Puzey, counsel.
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Section 30 of the Value Added Tax Act 1994 (“VATA 1994”) provides that a supply of goods or services is zero-rated if the supply is of a description specified in Schedule 8.
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Group 5 of Schedule 8 describes supplies relating to the construction of buildings. Item 2 of Group 5 describes:
“2. The supply in the course of construction of –
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a building … intended for use solely for a … relevant … charitable purpose … of any services related to the construction other than the services of an architect …”
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Note 6 of Group 5 provides:
“6. Use for a relevant charitable purpose means use by a charity in either or both the following ways, namely –
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otherwise than in the course or furtherance of a business;
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as a village hall or similarly in providing social or recreational facilities for a local community”
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The Commissioners argued firstly that, the Appellant was not a charity, and secondly that the Clubhouse was not intended for use solely as a village hall or similarly in providing social or recreational facilities for a local community. The Appellant argued that the intended use was by a charity, and that it was intended for use solely as a village hall or similarly in providing social or recreational facilities for a local community. Accordingly, the two issues for determination in this appeal were whether the intended use was use by a charity, and whether the Clubhouse was intended for use solely as a village hall or similarly in providing social or recreational facilities for a local community.
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Oral evidence was given at the hearing on behalf of the Appellant by Mr Jim Houghton, the marketing officer and development officer of the Appellant. An agreed bundle of documents containing 189 pages was produced, together with plans and photographs of the Clubhouse. No oral evidence was given on behalf of the Commissioners. We found Mr Houghton to be a credible witness and we accepted his evidence as to the facts.
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The parties produced and referred to the following authorities:
Jubilee Hall Recreation Centre Limited v Commissioners of Customs and Excise – Court of Appeal [1999] STC 381
Commissioners of Customs and Excise v St Dunston’s Educational Foundation – Court of Appeal [1999] STC 381
Ormiston Charitable Trust v Commissioners of Customs and Excise [1994] (No. 13187)
The South Molton Swimming Pool Trustees v Commissioners of Customs and Excise [1999] (No. 16495)
Ledbury Amateur Dramatics Society v Commissioners of Customs and Excise [2000] (No. 16845)
Bennachie Leisure Centre Association v Commissioners of Customs and Excise [1996] (No. 14276)
Guild v Inland Revenue Commissioners – House of Lords – [1992] 2A.C. 310
The Facts-
The Appellant, Sport in Desford (“SiD”) (“the Club”) is a Club which provides sporting and recreational facilities. It is a members club. At the time of the decision of the Respondents dated 12 August 1999, the Club was not a registered charity. The Club registered as a registered charity with the Charity Commission on 27th October 2003. It is not registered for value added tax.
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Under the Club’s 1990 constitution, its stated object was “Sport in Desford exists to promote sporting opportunities within the village for all sections of the Community. Disabled access must be included in all developments”. This was the constitution in force at the time of the decision of the Respondents. A more detailed constitution was adopted on 6 March 2002 which set out the Club’s objects as “the promotion of community participation within the village of Desford and its environs in healthy recreation, in particular by the provision of facilities for playing bowls, tennis squash, football, recreational fitness and running”.
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Desford is a small village outside Leicester. It had approximately 4,000 inhabitants in 1997, and was estimated by Mr Houghton to have approximately 4,500 inhabitants now. The main site of the Club consists of five acres at Peckleton Lane, Desford, and there is a subsidiary site consisting of three acres at Kirkby Road, Desford.
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In 1986, Desford Parish Council were approached by two groups to improve community and leisure facilities within the community. The first group consisted of two senior football teams and a junior football team who had found the existing site run by the Parish Council at the recreation ground in Kirkby Road to be insufficient for their needs and had requested a second site. The second group involved a group of parishioners seeking the building of a bowls green within the parish. At the time, the Parish Council had the funds to at least purchase land to fulfil these two requests. After considering a number of sites, the Parish Council decided to purchase a four acre site at Peckleton Lane from the Caterpillar company who occupied the war time site of Desford Aerodrome. That site which the council purchased was derelict and had been originally occupied by the Sergeant’s mess, with all buildings demolished except for a lone squash court and an outside double tennis court. On that site, there was room for the proposed football pitch but not enough room to add the bowls green. The Parish Council then undertook to purchase a further adjacent one acre site from a local farmer to accommodate the bowls green. That transaction was completed in 1988. The sites purchased then totalled 5 acres.
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The Parish Council decided that this was too big a project for the Council itself, so it set up a committee, called Sport in Desford (“SiD”), to administer the further development of the site including a stipulation that three Parish Councillors should always remain on the committee. The chairman of SiD was the vice-chair of the Parish Council. The Parish Council formalised this arrangement by setting up a lease on the...
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