Exemption not granted

Are subsidiaries of a non-profit making entity eligible bodies?

The taxpayer was the representative member of a VAT group which included two wholly owned subsidiaries Bradfield College Developments Ltd and Bradfield College Enterprises Ltd. They made supplies of sports services which were treated as made by the taxpayer as representative member of the group.

It later claimed these were exempt under VATA 1994 s 31 and Sch 9 Group 10 item 3 as supplies by an eligible body of services closely linked with and essential to sport or physical education. HMRC refused the claim.

It was common ground that the taxpayer as an educational charity was an eligible body. The issue was whether the organisations Developments Ltd and Enterprises Ltd that physically made the supplies were exempt.

The First-tier Tribunal held that neither was an eligible body within the meaning of Sch 9 Group...