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Phrase has direct effect

08 September 2014
Issue: 4468 / Categories: Tax cases , VAT

CRC v British Film Institute, Upper Tribunal (Tax and Chancery Chamber)

The taxpayer organisation formed in 1933 as private company limited by guarantee. It accounted for VAT at the standard rate on admission charges to movie screenings at the National Film Theatre (now the BFI Southbank) and other venues in the period from January 1990 to June 1996.

The taxpayer claimed repayment of overpaid VAT of £1.2m in March 2009 on the basis the charges were supplies of cultural services and exempt under article 13A(1)(n) of the Sixth Directive (now article 132(1)(n) of Council Directive 2006/112).

HMRC refused on the grounds that article 13A(1)(n) was too vague to have direct effect the UK not having implemented the article until June 1996 (VATA 1994 Sch 9 group 13).

The First-tier Tribunal allowed the taxpayer’s appeal deciding the article had direct effect in the claim period regardless of the fact it had not been passed into UK law.

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