Upper Tribunal Tax and Chancery Chamber

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

Fecha: 09-Oct-2024

ground 2: item 1(c): an event “that is promoted as being primarily for the raising of money”

ground 2: item 1(c): an event “that is promoted as being primarily for the raising of money”

The FTT’s decision

63.

The FTT began by stating as follows, at FTT[107]:

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

64.

Having set out Article 132(1)(o) of the PVD, the FTT then observed, at FTT[109]:

The Directive does not contain - either expressly, or by way of necessary implication - any requirement than an event be promoted primarily for the raising of money. The only qualification is that the exemption "is not likely to cause distortion of competition".

65.

The FTT noted that in Loughborough FTT, Judge Kempster concluded that Item 1(c) was incompatible with the Directive , but that the incompatibility could be “cured” by interpreting it in a conforming manner in accordance with the Marleasing principle. The FTT agreed with this conclusion. The FTT stated that the parties agreed that (1) the FTT should continue to interpret and apply VATA as it would have been interpreted and applied prior to the UK leaving the EU, and (2) domestic law is to be interpreted so as to conform with EU law: FTT[118]-[119].

66.

In Loughborough FTT the FTT concluded that that Item 1 could be read in a conforming manner so as to be compliant with the PVD by omitting Item 1(c) in its entirety. The FTT agreed with the analysis and decision of Judge Kempster and adopted it. However, the FTT noted that it would have reached the same result by deleting the word “primarily” in Item 1(c), rather than the entire sub-clause: FTT[128].

67.

The FTT stated at FTT[131]:

In this appeal, Judge Kempster's reading, or our alternative reading, would each have led to an identical outcome, because the Show - as HMRC in the course of its submissions accepted - was promoted for the raising of money, even if not primarily…

68.

The FTT expressed concern at the lack of clarity in HMRC’s case as to what compliant promotion would actually have looked like. It considered that HMRC’s approach was “self-evidently unworkable, either by taxpayers or HMRC, and gives no certainty to either”: FTT[133].

69.

The FTT summarised its conclusion at FTT[141]. This was that the Show satisfied Item 1(c) either because Item 1(c) in its entirety was an incorrect transposition of the Directive into UK law, and should be deleted, or because the word “primarily” was an incorrect transposition and should be deleted.