An association representing the interests of various leisure industry members has failed to persuade the Upper Tribunal that it is entitled to a substantial Value Added Tax (VAT) rebate on its membership subscriptions over a period of more than 25 years on the basis that its primary role is that of lobbying the government.
The British Association of Leisure Parks, Piers and Attractions Limited argued that its membership subscriptions were VAT-free under schedule nine, group nine, item 1(d) of the Value Added Tax 1994 which exempts from VAT associations the primary purpose of which is to make representations to the government in respect of matters which affect the business or professional interests of their members. The association argued that about 70% of its time and resources are spent on lobbying.
However, in dismissing the association’s appeal, the tribunal ruled that its objects could not be compared with those of a trade union or other pressure group. As well as political lobbying, its stated objectives embraced, inter alia, the promotion of safe practice, dissemination of information, training and facilitating networking. Although making representations to government had become its dominant function in more recent years, it had not lost its character as a trade association.
The tribunal went on to rule that, as the association had charged its members VAT on their subscriptions, to direct Her Majesty’s Revenue and Customs to reimburse output tax paid between 1982 and 2008 would amount to ‘unjust enrichment’.