Upper Tribunal Tax and Chancery Chamber

UT/2023/000115 - [2025] UKUT 00004 (TCC)

Fecha: 09-Oct-2024

factual background

factual background

There is no dispute as to the facts in this case, and the following summary is taken from the Decision. References in the form FTT[x] are to paragraphs of the Decision.

Since it is only the 2016 repayment which is the subject of this appeal, we are concerned only with the facts relating to the Show in that year, even though the FTT made findings in relation to the 2017 Show. The parties agreed that that should not have any material impact on our decision. References below to the Show are to the 2016 Show.

The Society was founded in 1837. It is a membership organisation with more than 12,000 members, a charitable company limited by guarantee and a registered charity. Its charitable objects are as follows:

(1)

To support and promote agriculture, rural and allied industries throughout the North of England, including championing the role of farmers as providers of high quality produce and encouraging consumers to choose healthy and local produce.

(2)

To advance and encourage agricultural research and greater understanding and empathy with farming and the countryside amongst the general public and particularly children.

(3)

To advance and encourage the protection and sustainability of the environment.

(4)

To hold in pursuance of its main objectives an annual agricultural show.

On the basis of written evidence, management accounts of the Society and evidence from the Society’s Financial Controller, Mr Stoddart, the FTT set out certain findings of fact at FTT[42]:

42.

On the basis of the above, and Mr Stoddart's evidence, which we accept, we find:

(1)

The Society's activities, done pursuant to its charitable purposes, include promotion of the existence and work of the Society generally. This is increasingly important to the Society because, historically, the Society and the Show were two completely different 'brands': the Show was very well-known and high-profile, but the Society much less so. The Society was and is trying to increase its prominence and profile as a society per se, and as an organisation which does more than just run the Show;

(2)

The Society's activities, done pursuant to its charitable purposes, also include the promotion of public awareness in farming, and supporting farmers;

(3) It holds the Show as one way in which to fulfil its charitable purposes;

(4)

The Society undertakes fundraising. The task of fundraising is one for the Society's board of trustees. There is no fundraising committee, but Mr Stoddart attends the board of trustees;

(5)

The overall budget for the Show is set by Mr Stoddart and the Society's Chief Executive;

(6)

There is a planning team for the Show, led by a "Show Director", whose work is overseen by the board of trustees;

(7)

One of the main tasks of the Show's planning team is to consider how to raise as much money as possible from the Show, which is part of raising as much money as possible for the Society to give away through its charitable activities;

(8)

The Show is budgeted to make a surplus, and has always been managed with that in mind;

(9)

For 2016, the income generated by the Show was approximately £3.463m (being principally composed of £1.483m admissions, £1.114m trade stand fees and £220,000 stock and sundry entry fees) with expenditure incurred directly or proportionally in respect of the show (being principally composed of site costs, personnel costs, displays, prizes, printing and publicity, staff costs) being approximately £2.025m, thereby generating a surplus of approximately £1.437m;

…

(11)

The Society pays to put the Show on, as well as paying for some of the permanent infrastructure at the Showground, which is used all-year round and not just during the Show;

(12)

The Show usually runs for 3 days in mid-July, from 7.30 in the morning to 7.30 in the evening (with a 6.30 close on the last day). In 2016 it ran from Tuesday 12 - Thursday 14 July…

(13)

The Show is well-attended. Attendance at the Show is capped at 35,000 a day; this being about 20,000 ticket sales, and 15,000 other people on the site such as exhibitors, stewards, and other staff (such as gate staff/security, car-parking marshals, catering and sanitary staff);

(14)

The whole Show is stewarded by about 300-350 unpaid volunteers who, amongst other tasks (such as helping get animals into the show-ring in the right sequence) go around helping people, and giving more information on a one-to-one basis.

(15)

During the Show, the Site is split up into several 'zones';

(16)

The 'Discovery Zone' is aimed at children. Its main aim is to educate people about what goes on in the countryside, and to encourage them to find out more. It holds a number of workshops, for example showing how rapeseed oil is produced from seeds, a butcher showing how meat is butchered; bread-making and other 'hands-on' activities;

(17)

The showing of livestock (cattle, sheep, pigs and goats) is one of the main attractions of the Show, bringing animals from across the whole UK. It is not just a competitive exercise, but itself is something done to promote best practice in rearing animals, including animal wellbeing;

(18)

Many of the activities at the Show - showing livestock, equine activities such as show-jumping, sheep-shearing, and gun-dog demonstrations - are accompanied by live commentary, which is descriptive and educative - for example, the commentary will say what is happening, why it is done, and what the judges are looking for;

(19)

There are some 'trade' and rare-breed stalls. The latter are 'hands-on' and allow people to stroke the sheep (for example);

(20)

The food zone includes not only things such as a cheese show, but also demonstrations of cookery in a cookery theatre;

(21)

The motor zone is principally a demonstration of modern agricultural machinery such as tractors and trailers, but also has auto-dealer trade stands where it is possible to buy a vehicle.

The FTT also set out the following findings of fact which are important in this appeal, at FTT[43]-[46]:

43.

The Appellant accepts - in its Grounds of Appeal - that it did not "promote" the 2016 Show as being "primarily" for the raising of money.

44.

Mr Stoddart's evidence was that (i) the Society putting the Show on, and (ii) the Society spending money on its charitable aims, were 'entwined'. He said that "you cannot do one without the other", by which he meant (as we understand it, and to paraphrase), without the money from the Show itself, there would be no Show at all. He also said that there were two purposes to the Show: fundraising, and education.

45.

We accept that evidence.

46.

It is also consistent with contemporary documentary evidence.