True beneficiaries of provision of boathouse facilities

The taxpayer owned a boathouse and supplied the facilities to three separate rowing clubs through a 99-year licence first agreed in January 2017. The main aim of the clubs was to encourage and train top quality rowers who could beat Oxford University in the annual boat race. The taxpayer and the clubs were non-profit making bodies.

A dispute arose as to whether the fees charged by the taxpayer to the clubs qualified for the VAT exemption as a supply by an eligible body to an individual for services closely linked to participation in sport (VATA 1994 Sch 9 group 10 item 3). There was no doubt that the taxpayer was an eligible body and that the licence related to sport so the relevant issue was whether the true beneficiaries of the supply were the clubs or the rowers. The taxpayer charged about £40 000 to the clubs each...