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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.

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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.

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