In United Grand Lodge of England v HMRC [2021] TC08250, the First Tier Tribunal (FTT) found that membership fees charged to Freemasons were not exempt from VAT.

  • The United Grand Lodge of England (UGLE) is the governing body for the majority of Freemasons in England and Wales. It charged VAT to its members on membership fees.
  • In 2014 and 2018, UGLE made claims to HMRC for repayment of the VAT charged, totalling £2.83m, on the grounds that between April 2010 and March 2018 the supplies were exempt from VAT.
  • HMRC rejected UGLE’s repayment claims, asserting the supplies were taxable. UGLE Appealed to the FTT.

The Principal VAT Directive (PVD) and Group 9, Schedule 9, VATA 1994 exempt subscriptions from VAT where they relate to certain bodies with specific aims.

In the case of UGLE, the supply of its Services to members would be exempt from VAT if:

  • Its philosophical, philanthropic and civic aims constituted a single primary aim.
  • When taken together, its philosophical, philanthropic and civic aims were its only main aims.

This is the second time the FTT has considered UGLE’s aims in a VAT context.

  • In 2013, UGLE appealed against HMRC’s earlier decision that membership fees between 1973 and 1996 were not exempt.
  • Although UGLE’s 2013 appeal was unsuccessful, the FTT commented in that earlier decision that since 2000 there appeared to be some change within UGLE. This led to the current appeal, considering the 2010 to 2018 period.

The FTT rejected UGLE’s appeal in respect of 2010 to 2018, finding that:

  • UGLE had a philosophical aim which was a central or main aim.
  • The provision of ‘Relief’ was also the main aim of UGLE and of at least equal importance to its philosophic aim.
    • This aim of Relief had two parts: donations to unconnected good causes and supporting Freemasons and their dependants in distress.
    • The second of these parts was not a philanthropic aim for the purposes of the PVD.

As the provision of Relief was a main aim that was partly non-philanthropic, the services supplied by UGLE to its members were not exempt from VAT.

Useful guides on this topic

Appeals: VAT
How do I appeal an HMRC decision?  How do I appeal a penalty?  How can I request a Statutory Review? 

Goods or services for VAT?
What are goods and what are services for VAT? The answer may have an impact on the time of supply, the place of supply and in some cases the rate of the supply. The answer is not always as straightforward as it may seem.

Reclaims and unjust enrichment
When can VAT reclaims be made? What are the time limits? What is unjust enrichment? Why might unjust enrichment prevent HMRC making VAT repayments? 

External link

United Grand Lodge of England v HMRC [2021] TC08250


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