An Oxfordshire cricket club, which wrongly believed it did not have to pay the taxman for building work on its new pavilion, has had to stump up the money for a hefty tax bill after losing a VAT dispute.
A ruling by a Tax Tribunal found that Eynsham Cricket Club was liable for VAT on the cost of the builder’s services. As the club was not VAT registered, it could not reclaim the tax paid.
To be exempt from VAT, the club either needed to prove it was a charity, the building would be used for charitable purposes, for example as a ‘village hall’ or similar and it would also have been required to issue a certificate to the builder confirming it held an exemption from VAT.
The club, as a Community Amateur Sports Club (CASC) had argued that, despite not being a registered charity, it should be treated as such because it aims to promote participation in sport.
The club’s argument was rejected by the tribunal, meaning that VAT applied to the transaction.