Upper Tribunal dismisses HMRC appeal over leisure facility admissions charges and VAT

The Upper Tribunal has dismissed an appeal by HM Revenue & Customs over the VAT liability for admissions charges for sports and leisure facilities provided by Chelmsford City Council.

In Revenue and Customs v Chelmsford City Council [2022] UKUT 149 (TCC) Mrs Justice Joanna Smith and Judge Swami Raghavan said the central issue in particular was "whether, as HMRC contends, Chelmsford was acting as a taxable person when providing the Facilities (and so was subject to VAT) or whether, as Chelmsford argues, it was acting as a public authority pursuant to Article 13(1) of the Principal VAT Directive 2006/112/EC (the “PVD”),” the judges, 

They added that under the relevant case-law on Article 13 of the PVD, that question turned on whether the body providing the facilities was acting pursuant to a “special legal regime” applicable only to the public authority and not to private operators.

In Chelmsford City Council v Commissioners for HM Revenue & Customs [2020] UKFTT 432 (TC) the FTT had agreed with Chelmsford that its services were provided under a special legal regime and that, accordingly, the supplies did not bear VAT.

HMRC appealed against the decision on that issue with the permission of the FTT.

The Upper Tribunal has now dismissed that appeal.

By a voluntary disclosure submitted in December 2010, Chelmsford claimed repayment of VAT allegedly overpaid in VAT accounting periods between 2006 and 2010, totalling around £0.9 million.