Charitable purpose

The taxpayer company was a registered charity that promoted itself as a centre of excellence for the advancement of education in water and outdoor and indoor activities for young people.

When the business took over its site in 2005 it built a training centre at a cost of £135 000 as part of an upgrade of the facilities.

HMRC ruled that the construction services supplied to the taxpayer were not zero-rated within VATA 1994 sch 8 group 5 items 2 and 4. The taxpayer appealed on the ground tthe building was to be used solely for charitable purposes.

The question before the First-tier Tribunal (FTT) was whether the taxpayer had been carrying on a business. The tribunal set out the six criteria described in Institute of Chartered Accountants in England and Wales v CCE [1999] STC 398 for determining whether an enterprise amounted to the carrying on of...