- Spiritual retreats run by Church of England priest are not state-regulated and not exempt from VAT (Reverend Jane Taylor (t/a Mill House Retreats) v HMRC)
- What are the practical implications of this case?
- What was the background?
- What did the court decide?
- Case details
Private Client analysis: Reverend Jane Taylor is a priest in the Church of England and runs Christian retreats from her home, trading as Mill House Retreats. She appealed a decision made by HMRC that VAT is payable on the services she provides. The relevant legislation is item 9 of Group 7 (Health and Welfare), Schedule 9 to the Value Added Tax Act 1994 (VATA 1994) which provides a VAT exemption for the supply of welfare services by a charity, a state-regulated private welfare institution or agency or a public body of welfare services and of goods supplied in connection with those welfare services. The First-Tier Tax Tribunal (FTT) concluded that the spiritual welfare provided by Reverend Taylor in the course of her Mill House Retreat activities is not an exempt supply for VAT because it does not fall within the scope of VATA 1994, Sch 9, group 7. Although Mill House Retreats is regulated by the state (being subject to the supervision and regulation of the Church of England as an emanation of the state, as an established church), it is not 'state-regulated' as defined in Note 8 to VATA 1994, Sch 9, group 7. To be 'state-regulated' an entity must be regulated by a Government Minister pursuant to a public general Act. The FTT also found that VATA 1994, Sch 9, group 7 does not contravene principles of fiscal neutrality. Written by Alexandra Rogers, managing associate at Foot Anstey LLP.
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