Taxation logo taxation mission text

Since 1927 the leading authority on tax law, practice and administration

Link remains

16 May 2013
Issue: 4404 / Categories: Tax cases , VAT

HMRC v Esporta Ltd, Upper Tribunal (Tax and Chancery Chamber)

The taxpayer company ran health and fitness clubs. Members could pay their fees via a monthly direct debit. Membership was not terminated if a payment was not made but the member was denied access to the clubs.

The company originally treated late-paid fees as standard-rated membership fees. It took the view in 2010 they were not consideration for a taxable supply of services but were damages or compensation for breach of contract and outside the scope of VAT.

The taxpayer claimed repayment of overpaid VAT for the previous years. HMRC refused the claim.

The First-tier Tribunal found for the company ruling that the fees recovered were compensatory in nature. The Revenue appealed.

The Upper Tribunal disagreed with the previous ruling. The judge concluded that the monthly payments were consideration for the supply of services whether the fee was paid early on time or late.

Preventing access...

If you or your firm subscribes to Taxation.co.uk, please click the login box below:

If you are not a subscriber but are a registered user or have a free trial, please enter your details in the following boxes:

Alternatively, you can register free of charge to read a limited amount of subscriber content per month.
Once you have registered, you will receive an email directing you back to read this item in full.

Please reach out to customer services at +44 (0) 330 161 1234 or 'customer.services@lexisnexis.co.uk' for further assistance.

back to top icon