No exemption for subscription fees

The taxpayer was the governing body for most freemasons in England Wales and the Channel Islands. It was a non-profit making body and had net assets of £70m. The 175 000 members were split into 6 500 different lodges. Some members belong to more than one lodge.

The issue was whether the monthly subscription fees paid by members qualified for exemption from VAT on the basis that the taxpayer provided services to members of a ‘philosophical philanthropic or civil nature’ (VATA 1994 Sch 9 group 9).

HMRC agreed that the taxpayer had philosophical and philanthropic aims but said it also had social aims as well as intentions for self-improvement.

The First-tier Tribunal dismissed the taxpayer’s appeal concluding that while the organisation had philosophical aims it also had a more important aim of supporting freemasons and their dependents in distress.

The taxpayer appealed.

The Upper Tribunal said the First-tier...