Funding for charity to provide leisure services is subject to VAT

0370 270 6000

Search Mobile

collapse

already registered?

Please sign in with your existing account details.

Email address

Password

need to register?

Register to access exclusive content, sign up to receive our updates and personalise your experience on brownejacobson.com.

Privacy statement - Terms and conditions

Forgotten your password?

collapseSign

Home

Insights & events

Resources

Blogs

Funding for charity to provide leisure services is subject to VAT

1 March 2012

The First-tier Tribunal has refused an appeal by Aberdeen Sports Village Ltd (ASV) against HMRC’s assessment that VAT was payable on annual funding provided by Aberdeen City Council (ACC) and Aberdeen University (AU) to meet the running costs of ASV, pursuant to a joint venture arrangement.

The tribunal found that there was a supply of services by ASV to ACC and AU, that the funding was consideration for the supply of such services and that there was a direct link between the payers and ASV sufficient to incur a liability to VAT.

This case is a timely reminder of the VAT implications where funding is found to be consideration for a supply of services and not a grant or donation. Given the government’s commitment to promoting the use of charities, social enterprises, mutuals and co-operatives to run public services and the ongoing shift towards public service contracting and away from grant funding, thought should be given to any proposed scheme and its potential tax implications.

Related opinions

Flexible working, childcare and indirect sex discrimination – important reminder

The courts have long recognised that, on a societal level, women bear a greater burden of childcare responsibilities than men which can make it more difficult for women to comply with employer requirements for flexible working (known as the ‘childcare disparity’).

View blog