Upper Tribunal Tax and Chancery Chamber

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

Fecha: 09-Oct-2024

relevant legislation

relevant legislation

The only issue in this appeal is the applicability of a particular exemption from VAT to certain supplies by the Society in connection with the Show.

The relevant domestic provisions derive from EU legislation, namely Article 132 of the Principal VAT Directive 2006/112/EC (the “PVD”). Title IX of the PVD sets out various exemptions. Article 131 of the PVD states as follows:

The exemptions provided for in Chapters 2 to 9 shall apply without prejudice to other Community provisions and in accordance with conditions which the Member States shall lay down for the purposes of ensuring the correct and straightforward application of those exemptions and of preventing any possible evasion, avoidance or abuse.

10.

Chapter 2 is headed “Exemptions for certain activities in the public interest”. The relevant parts of Article 132 state as follows:

1 Member States shall exempt the following transactions:

…

(o)

the supply of services and goods, by organisations whose activities are exempt pursuant to points (b), (g), (h), (i), (l), (m) and (n), in connection with fund-raising events organised exclusively for their own benefit, provided that exemption is not likely to cause distortion of competition;

…

2 For the purposes of point (o) of paragraph 1, Member States may introduce any restrictions necessary, in particular as regards the number of events or the amount of receipts which give entitlement to exemption.

11.

Article 131 provides as follows:

The exemptions provided for…shall apply without prejudice to other Community provisions and in accordance with conditions which the Member States shall lay down for the purposes of ensuring the correct and straightforward application of those exemptions and of preventing any possible evasion, avoidance or abuse.

12.

In domestic legislation, VAT exemptions are dealt with by section 31 Value Added Tax Act 1994 (”VATA”), which states, in section 31(1), that “a supply of goods or services is an exempt supply if it is of a description for the time being specified in Schedule 9”.

13.

Group 12 of Schedule 9 VATA is headed “Fund-raising events by charities and other qualifying bodies”. Item 1 of Group 12 provides exemption for:

The supply of goods and services by a charity in connection with an event—

(a)

that is organised for charitable purposes by a charity or jointly by more than one charity,

(b)

whose primary purpose is the raising of money, and

(c)

that is promoted as being primarily for the raising of money.

14.

Note 11 to Group 12 states as follows:

Items 1 to 3 do not include any supply the exemption of which would be likely to create distortions of competition such as to place a commercial enterprise carried on by a taxable person at a disadvantage.

15.

The exemption for fund-raising events by charities contained in Item 1 of Group 12 was enacted in its present form, with effect for supplies made after 1 April 2000, by the Value Added Tax (Fund-Raising Events by Charities and Other Qualifying Bodies) Order 2000, SI 2000/802. Particularly since certain of the relevant authorities deal with the earlier wording, which we refer to below as the “pre-2000 provision”, it is necessary to set out that earlier wording.

Group 12—Fund-Raising Events by Charities and Other Qualifying Bodies

Item No

1 The supply of goods and services by a charity in connection with a fund-raising event organised for charitable purposes by a charity or jointly by more than one charity.

2 The supply of goods and services by a qualifying body in connection with a fundraising event organised exclusively for its own benefit.

Notes

(1)

For the purposes of items 1 and 2 “fund-raising event” means a fête, ball, bazaar, gala show, performance or similar event, which is separate from and not forming any part of a series or regular run of like or similar events.