22 November 2021 Andrea Marshall, Tax Specialist
This First Tier Tribunal decision has been released in the Cambridge University Boathouse Ltd (CUBL) (case (TC) 08304). A link to the case can be found here.
CUBL sought to apply VAT to its supplies, thus enabling VAT recovery on the construction costs of a boathouse – the VAT at stake was £575k. The Tribunal ruled that supplies were made to three elite rowing clubs, whose primary purpose was to win the Cambridge/Oxford boat race), rather than individuals, thus the supplies were taxable.
The legislation
The issue before the Tribunal was whether the supply of the Boathouse came within the
sporting exemption in the Value Added Tax Act 1994 (“VATA”), Schedule 9, Group 10, Item 3, which reads:
“The supply by an eligible body to an individual of services closely linked
with and essential to sport or physical education in which the individual is
taking part.”
Summary of the decision
The Tribunal decided that the Clubs (not the individual rowers) were the true beneficiaries, because they have the right to use the Boathouse for their training programmes and the right to store their equipment, and they pay for those rights. In contrast, the rowers (being the “individuals”):
Does this case jeopardise the exemption of other supplies to individuals when made “through” an amateur club?
Paragraphs 110-112 of the decision appears to differentiate this case:
(1) have an identity which continues beyond the current active participants;
(2) select teams and reject others who would like to play; and
(3) own the major items of equipment and the rights to carry out the sport in a particular location. For instance, rowing clubs typically own the boats, and football clubs license the pitch and provide the goal posts, corner posts, nets and balls.
If you have any questions or observations, please contact Andrea.