Upper Tribunal Tax and Chancery Chamber

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

Fecha: 09-Oct-2024

ground 1: item 1(b): an event “whose primary purpose is the raising of money”

ground 1: item 1(b): an event “whose primary purpose is the raising of money”

The FTT’s decision

25.

The FTT began its consideration of this issue by referring to the FTT decision of Judge Kempster in Loughborough Students Union v HMRC [2018] UKFTT 357 (TC) (“Loughborough FTT”). The FTT stated that it agreed with Judge Kempster that “Item 1(b) refers to “a” primary purpose, and not “the” primary purpose, and that a primary purpose means a purpose which is important”: FTT[84].

26.

The FTT considered that this accorded with a purposive reading of the exemption. It then stated that it also chimed with the approach taken by earlier tribunals in relation to the pre-2000 provision, in Blaydon Rugby Football Club v Commissioners of Customs and Excise [1996] V & DR 1 (“Blaydon”) and Newsvendors Benevolent Institution v Commissioners of Customsand Excise (1996) VAT Decision 14343 (“Newsvendors”).

27.

The FTT referred to HMRC’s internal guidance on the exemption to support its conclusion that the promotional and advertising material for the Show sufficed to show that the “main and overriding purpose” of holding the event was fund-raising.

28.

The FTT determined that Item 1(b) was satisfied for the following reasons, at FTT[92]-[96]:

92.

Therefore, taken overall, in our view:

(1)

Fund-raising was not the exclusive purpose of the Show;

(2)

The Show had two main purposes: (i) fund-raising, and (ii) education.

93.

We cannot sensibly rank these in order of importance, and neither party sought to advance any analysis which would enable a ranking of purposes to be empirically, reliably and/or sustainably undertaken on the facts of this case.

94.

Overall, our impression is that it could not be said that either of these purposes was more important than the other. In that sense, looked at in the round, the two purposes are of equal importance. Beyond that, it seems to us that the two purposes not only co-exist, but are interdependent, and not independent.

95.

If fund-raising were not taken as a discrete purpose, but were taken as being one of two inter-dependent purposes, then, in our view, it was the main purpose of the Show, and it qualified for the exemption.

96.

In fund-raising were taken as a discrete purpose, then it was a main purpose of the Show, and it qualified for the exemption.

29.

It is first necessary to unpack the FTT’s decision. We consider that this passage records a decision that the event satisfied Item 1(b) on one or both of two alternative bases.

30.

The first basis is that fund-raising was not a discrete purpose; rather, the two main purposes of the Show were fund-raising and education, which were of equal importance and were inter-dependent, forming a single purpose which satisfied Item 1(b), even on HMRC’s construction.

31.

The second basis is that if fund-raising was taken as a discrete purpose, it was one important purpose of the Show, even though it was not the only or primary purpose, and that was sufficient to satisfy the exemption, properly construed.

32.

This reading is consistent with the FTT’s summary of its conclusion on Item 1(b), at FTT[140]:

Item 1(b) is met on the footing:

(1)

Fund-raising is one of two inter-dependent purposes, but was the main purpose of the Show; or

(2)

Even if not, then it was a main purpose of the Show, in the proper sense of the exemption.

33.

Therefore, in order for HMRC to succeed on Ground 1, they must establish that the FTT erred in law in relation to both of these alternative conclusions.