Midlothian Council v Revenue & Customs (VAT - Local authority - sports and leisure facilities - whether economic activity) [2020] UKFTT 433 (TC) (17 October 2020)

Midlothian Council v Revenue & Customs (VAT - Local authority - sports and leisure facilities - whether economic activity) [2020] UKFTT 433 (TC) (17 October 2020)

The Tribunal held that the Council's supplies of sports and leisure facilities constitute economic activities within the meaning of Article 9 PVD, are not exempt as activities engaged in as a public authority under Article 13 PVD, and are not eligible for VAT exemption under Note 3 Group 10 Schedule 9 VATA 1994. The Council is therefore liable to account for VAT on the charges for access to its sports and leisure facilities.

Citation
[2020] UKFTT 433
Parties
Appellant: Midlothian Council; Respondents: The Commissioners for Her Majesty’s Revenue and Customs
Jurisdiction
United Kingdom
Judgment Date
17 October 2020
Procedural Posture
VAT Appeal / First Tier Tribunal Decision
Outcome
Appeal dismissed
Legal Topics
VAT Liability, Economic Activity, Public Authority Exemption, Sports and Leisure Facilities, Distortion of Competition
Tax Law European Union Law Administrative Law VAT Liability Economic Activity Public Authority Exemption Sports and Leisure Facilities Distortion of Competition

Case Brief

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Parties

Midlothian Council

Appellant

The Commissioners for Her Majesty’s Revenue and Customs

Respondents

Procedural Posture

VAT Appeal / First Tier Tribunal Decision

Legal Issues

  1. 1 Are charges for access to sports and leisure facilities provided by a local authority subject to VAT?
  2. 2 Are such supplies 'economic activities' under Article 9 PVD?
  3. 3 Is the Council acting as a public authority under Article 13 PVD?

Ratio Decidendi

The Tribunal held that the Council's supplies of sports and leisure facilities constitute economic activities within the meaning of Article 9 PVD, are not exempt as activities engaged in as a public authority under Article 13 PVD, and are not eligible for VAT exemption under Note 3 Group 10 Schedule 9 VATA 1994. The Council is therefore liable to account for VAT on the charges for access to its sports and leisure facilities.

Court Disposition

Appeal dismissed

Orders

  • The Council's claim for repayment of VAT is rejected.
  • The Council remains liable to account for VAT on charges for access to sports and leisure facilities.