“ Exemptions for certain activities in the public interest 1. Member States shall exempt the following transactions: … (o) the supply of services and goods, by organisations whose activities are exempt pursuant to points (b), (g), (h), (i), (l), (m) and (n), in connection with fund-raising events organised exclusively for their own benefit, provided that exemption is not likely to cause distortion of competition; … 2. For the purposes of point (o) of paragraph 1, Member States may introduce any restrictions necessary, in particular as regards the number of events or the amount of receipts which give entitlement to exemption.”
“ Group 12—Fund-raising events by charities and other qualifying bodies Item No. 1 The supply of goods and services by a charity in connection with an event— ( a ) that is organised for charitable purposes by a charity or jointly by more than one charity, ( b ) whose primary purpose is the raising of money, and ( c ) that is promoted as being primarily for the raising of money. … NOTES … (4) Where in a financial year of a charity or qualifying body there are held at the same location more than 15 events involving the charity or body that are of the same kind, items 1 to 3 do not apply (or shall be treated as having not applied) to a supply in connection with any event involving the charity or body that is of that kind and is held in that financial year at that location. (5) In determining whether the limit of 15 events mentioned in Note (4) has been exceeded in the case of events of any one kind held at the same location, disregard any event of that kind held at that location in a week during which the aggregate gross takings from events involving the charity or body that are of that kind and are held in that location do not exceed£1,000 . (6) In the case of a financial year that is longer or shorter than a year, Notes (4) and (5) have effect as if for “15” there were substituted the whole number nearest to the number obtained by— ( a ) first multiplying the number of days in the financial year by 15, and ( b ) then dividing the result by 365. (7) For the purposes of Notes (4) and (5)— ( a ) an event involves a charity if the event is organised by the charity or a connected charity; … In this Note “organised” means organised alone or jointly in any combination, … (11) Items 1 to 3 do not include any supply the exemption of which would be likely to create distortions of competition such as to place a commercial enterprise carried on by a taxable person at a disadvantage.”
“GROUP 12 — FUND-RAISING EVENTS BY CHARITIES AND OTHER QUALIFYING BODIES Item No 1 The supply of goods and services by a charity in connection with a fund-raising event organised for charitable purposes by a charity or jointly by more than one charity. … Notes (1) For the purposes of items 1 and 2 “fund-raising event” means a fete, ball, bazaar, gala show, performance or similar event, which is separate from and not forming any part of a series or regular run of like or similar events. …”
“[12] The general principle is that VAT is payable on all goods or services supplied for consideration by a taxable person within the relevant territory. [The relevant points in art 132(1)] are exceptions to this general principle. In considering the scope of an exception to a general principle of Community law, the court should adopt a strict, but not strained, construction. A 'strict' construction is not to be equated, in this context, with a restricted construction. The court must recognise that it is for a supplier, whose supplies would otherwise be taxable, to establish that it comes within the exemption, so that if the court is left in doubt whether a fair interpretation of the words of the exemption covers the supplies in question, the claim to the exemption must be rejected. But the court is not required to reject a claim which does come within a fair interpretation of the words of the exemption because there is another, more restricted, meaning of the words which would exclude the supplies in question: Stichting Uitvoering Financiële Acties v Staatssecretaris van Financiën (Case 348/87) [1989] ECR 1737 ; Expert Witness Institute v Customs and Excise Comrs[2001] EWCA Civ 1882 ,[2002] STC 42 ,[2002] 1 WLR 1674 .”
“As I see it, a "fundraising event" is an event the main purpose of which is to raise funds. If a merely incidental purpose to raise funds were to qualify, then every pint that was pulled with a marginal profit resulting could constitute a "fundraising event". … Further I agree with [HMRC] that Note (1) must be construed against the background of the requirement that an exemption should not create a distortion of competition: see EC Sixth Directive art 13A(1)(m). This means that "fundraising" events are likely to be exceptional rather than routine in the life of the club.”
“in effect the Union is treating one event as exempt and exactly the same event the following week as taxable”
“[64] We consider that Isle of Wight [ie the CJEU decision in HMRC v Isle of Wight Council & others[2008] STC 2964 ] and Rank [ie the CJEU decision in HMRC v Rank Group plc[2012] STC 23 ] show that whether there is distortion of competition must be determined by reference to the nature of the activity and without regard to the particular market in which it is supplied. It is not necessary to show that there is actual competition between the two activities provided that the potential competition is a real and not purely hypothetical possibility. If the two activities are identical or similar from the point of view of the consumer and meet the same needs of the consumer then they are in competition with each other. If, further, the two activities are treated differently for the purposes of VAT then, as a general rule, that will be regarded as giving rise to a distortion of competition.”
“( g ) the supply of services and of goods closely linked to welfare and social security work, including those supplied by old people's homes, by bodies governed by public law or by other bodies recognised by the Member State concerned as being devoted to social wellbeing; … ( m ) the supply of certain services closely linked to sport or physical education by non-profit-making organisations to persons taking part in sport or physical education;”
“From the evidence available to me I find that LSU’s objects and activities are those of a student representative body promoting and supporting the general interests of its members; creating and promoting a good social, cultural and sporting life; and providing appropriate pastoral support for its members. I note that conclusion is consistent with what one would generally expect a good student union to be engaged in.”
“[65] Since the FTT dealt with the issue of the fund-raising exemption solely by reference to the UK legislation, it seems to us that it implicitly decided that the restrictions in Item 1 of Group 12 of Sch 9 to theVAT Act 1994 were intra vires the provisions of the VAT Directives. Unfortunately, the matter was not discussed in the decision and no reasons were given for the implicit answer to the ultra vires issue so that we cannot be confident that the FTT properly considered the issue. If this were simply a matter of analysis of the EU and UK legislative provisions then we could decide the point but we consider that the issue also raises questions of fact. [66] Our view is that, in order to decide whether the conditions in Item 1 of Group 12 of Sch 9 are ultra vires the provisions of the VAT Directives, it is necessary to determine: (1) applying the Isle of Wight and Rank cases, whether the exemption of the balls organised by the LSU gives rise to distortion of competition; and, if so, (2) do the conditions make the exemption of such events unlikely to cause distortion of competition? We consider that the first question cannot be answered without determining whether the LSU balls and commercial events were sufficiently similar that they must be regarded as in competition with each other. That is a question of fact. The effect of the conditions on removing or reducing competition between fund-raising events and comparable commercial events is also a question of fact. Decision on fund-raising exemption [67] The FTT's decision proceeded on the basis that the restrictions in Item 1 of Group 12 of Sch 9 were not ultra vires the provisions in the Directives. In some circumstances, an implicit decision on such a point might be enough but, in this case, we consider that the absence of any discussion of the point in the decision means that there is real doubt that the issue was given proper consideration by the FTT. The only course open to us in the circumstances is to remit the appeal for a further hearing at which the parties may adduce further evidence and make submissions on the issue. [68] We have attempted to indicate the approach which the FTT might adopt in considering this issue, but we would not wish to be too prescriptive: the matter was not argued in depth before us, and further, and detailed, argument by the parties before the FTT may indicate that the issue should be approached with reference to different, or additional, factors. [69] There are some advantages to a further hearing before the same judge, and some to a fresh hearing before a differently constituted tribunal. In its application to the FTT for permission to appeal, the LSU asked the judge to review the decision on the fund-raising exemption but he decided not to do so. In the circumstances, we consider that it would be more appropriate to remit the matter to a differently constituted tribunal. [70] For the reasons given above, we remit the matter to the FTT to determine whether the conditions in Item 1 of Group 12 of Sch 9 to theVAT Act 1994 , that the raising of money must be the primary purpose of the event and that the event must be promoted as being primarily for the raising of money, are ultra vires the provisions in art 13A(1)(o) of the Sixth VAT Directive and, later, art 132(1)(o) and (2) of the Principal VAT Directive.”
“[258] … [In Marleasing the] ECJ held that the national court was required so far as possible under national law to interpret its national law so as to preclude a declaration of nullity in cases other than those prescribed in the directive. In other words, the national court was required to disapply provisions of its national law. [259] The ECJ helpfully commented on the Marleasing principle in Miret v Fondo de Garantía Salarial (Case C-334/92 )[1993] ECR I-6911 , para 20 of the judgment: '20. Thirdly, it should be borne in mind that when it interprets and applies national law, every national court must presume that the State had the intention of fulfilling entirely the obligations arising from the directive concerned. As the Court held in its judgment in Case 106/89 Marleasing v La Comercial Internacional de Alimentación[1990] ECR I-4135 , paragraph 8, in applying national law, whether the provisions in question were adopted before or after the directive, the national court called upon to interpret it is required to do so, so far as possible, in the light of the wording and the purpose of the directive in order to achieve the result pursued by the latter and thereby comply with the third paragraph of Article 189 of the Treaty.' [260] The obligation of our courts to interpret domestic legislation in conformity with Community law if it is possible to do so is a powerful one, requiring the court to go beyond what could be done by way of statutory interpretation where no question of Community law or human rights is involved: see R (IDT Card Services Ireland Ltd) v Customs and Excise[2006] EWCA Civ 29 ,[2006] STC 1252 ; Litster v Forth Dry Dock and Engineering Co Ltd [1989] [All ER 1134,[1990] 1 AC 546 . …”
“The supply of goods and services by a charity in connection with an event— ( a ) that is organised for charitable purposes by a charity or jointly by more than one charity, and ( b ) whose primary purpose is the raising of money.”