The recent Upper Tier Tribunal decision in the case of Eynsham Cricket Club clarifies the VAT position of community amateur sports clubs (CASCs).
The Club was planning to build a new pavilion and the new construction work could be zero-rated for VAT if the CASC qualified as a charity, and the pavilion was to be used for non business purposes or as a village hall.
CASCs are a relatively new entity, and the question of their charitable status has evolved over the last 15 years as charity law and charity tax law has developed.
The taxpayer argued that the wording of the legislation setting up CASCs and the Charities Act 2011 and the Finance Act 2010 could be taken together to mean that CASCs were established for charitable purposes even though they did not explicitly have charitable status.
However, the Upper Tier Tribunal agreed with HMRC that a CASC was not a charity for VAT purposes and could not therefore benefit from zero-rating for its new construction work.
The decision is notable for its observation that “anyone who has ever played cricket will be aware of the importance of the tea interval”.