Commentary

BB/19A/05 VAT—High Court decision: Church of England Children's Society

Part V16 Forms and other HMRC material

BB/19A/05 VAT—High Court decision: Church of England Children's Society

BB/19A/05 VAT—High Court decision: Church of England Children's Society

Business Brief, Issue 19. 10 October 2005

This Business Brief outlines the decision of the High Court in Church of England Children's Society (CECS) [2005] EWHC 1692 (Ch) (Part V10) in favour of the charity, and how HM Revenue & Customs intend to apply the decision. HMRC have decided not to appeal.

Background

CECS is a charity with a wide range of activities. To raise funds, it engages professional fundraisers to secure regular donations from members of the public. Those donating at least £5 per month receive a copy of the charity's newsletter three times a year.

The VAT Tribunal decided that—

  1.  

    —     the fundraisers' fees related to the non-business activity of seeking donations, so the VAT incurred on them was not recoverable

  2.  

    —     the newsletters were not zero-rated supplies of printed matter. However, they were deemed zero-rated gifts of business assets and input tax on their production and distribution costs was recoverable following the decision of the High Court in West Herts College [2001] STC 1245 (Part V10).

CECS appealed to the High Court against the first part of the Tribunal's decision and HMRC cross-appealed on the second

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