Court of Appeal confirms CASC not a charity for VAT

In Eynsham Cricket Club v HMRC [2021] EWCA Civ 225, the Court of Appeal confirmed that a Community Amateur Sports Club (CASC) is not the same as a charity for VAT purposes.

Eynsham Cricket Club (ECC) is a community cricket club and registered as Community Amateur Sports Club (CASC).

• The ECC believed that its cricket pavilion should be zero-rated on the grounds that it was a 'relevant charitable purpose' building.
  • VAT legislation defines 'relevant charitable purposes' as established for use by a 'charity'. It goes on to define a charity as a body of persons or trust that is established for charitable purposes 'only'.

HMRC argued that:

• The Club did not meet the VAT legislation's definition of charity.
• A CASC is specifically excluded from being a 'charity' by charity legislation.

The Club appealed to the First Tier Tribunal and it found that:

• A CASC can be regarded as a charity for VAT purposes, as long as it would otherwise be charitable.
• The Club’s objections, in particular to providing social facilities to the local residents, were not charitable.
• The Club did not meet the requirements for zero-rating.

The Club appealed to the Upper Tribunal (UT).

The UT found that although the Club was registered as a CASC it was not a charity and so its cricket pavilion could not be zero-rated. The appeal was dismissed.

The case was brought to the Court of Appeal.

• The Court of Appeal concluded a CASC cannot be a charity which consistent with the broader legislative context, history and purpose of the Acts.
• The Court of Appeal also rejected the Club’s claim that denial of zero-rating would breach the EU principles of equal treatment and/or fiscal neutrality because the Charity and CASC statutory regimes are different in terms of the burdens and reliefs available.
  • The difference in treatment is objectively justified due to the different regimes they have chosen to operate within.

The appeal was dismissed.

Comment

This decision follows hot on the heels of the Westow Cricket Club v HMRC [2021] UT 0023, decision. In Westow, the Upper Tribunal (UT) was mindful that the CoA was deciding the same point, happily, it reached the same decision on the status of a CASC.

The UT had 'noted that a Community Amateur Sports Club (CASC) is a creature of statute introduced by s.58 of and Schedule 18 to the Finance Act 2002 that exists for the purposes of some taxation treatment and in certain circumstances, a CASC is given the same tax treatment as a charity.

Useful guides on this topic

Land & Property VAT (notes)
An outline of the VAT treatment of some of the more common supplies of land and property.

Land & Property: Relevant residential & relevant charitable purpose
This guide is for subscribers. Property that is used for a relevant residential purpose or a relevant charitable purpose qualifies for special VAT rules.

External link

Eynsham Cricket Club v HMRC [2021] EWCA Civ 225