BB/3D/05 VAT—tribunal decision in Cirdan Sailing Trust

Part V16 Forms and other HMRC material

BB/3D/05 VAT—tribunal decision in Cirdan Sailing Trust

BB/3D/05 VAT—tribunal decision in Cirdan Sailing Trust

Business Brief, Issue 3. 21 February 2005

This Business Brief article outlines the position following the VAT and Duties Tribunal decision in the case of Cirdan Sailing Trust (LON/2003/0912).

The issue

Cirdan is a registered charity that provides training and instruction in the art and craft of sailing. It operates four large sailing vessels, each with a paid crew, which are chartered to organisations comprising groups of young people. The great majority of the young people in the groups are socially, physically or mentally disadvantaged.

Customs ruled that Cirdan's supplies are VAT-exempt sport or education but the charity appealed arguing it supplied zero-rated passenger transport. Cirdan further argued that any supplies of repairs and maintenance to the vessels were also liable to the zero-rate because, as commercial enterprises, their sailing vessels were neither designed nor adapted for use for recreation or pleasure and therefore fell into the definition of a 'qualifying ship'.

The Tribunal's decision

The Tribunal found for the appellants on both points with one reservation on a particular vessel that didn't fulfil the exact criteria for passenger transport, making that part a standard rated

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