Abusive scheme

Atrium Health Club took part in a tax avoidance scheme in order to benefit from the VAT sporting exemption under VATA 1994 Sch 9 group 10 item 3.

The scheme involved Atrium setting up a non-profit making company to run the sporting business of the club.

Supplies made by AAB would not be liable to VAT. AAB would pay the benefit derived from those supplies to Atrium by way of a licence fee under a turnover licence which also would not attract VAT.

HMRC said that Atrium continued to be liable to VAT on the supplies to club members.

The tribunal found for the taxpayer so HMRC appealed.

The issue was whether the scheme was an abusive practice within the Halifax principle (see Halifax plc v CCE (and related appeals) Case C-255/02 [2006] STC 919).

Mr Justice Roth...