Arson-hit Eynsham Cricket Club loses appeal against VAT bill

Eynsham Cricket Club in West Oxfordshire had spent four years trying to fight the bill, arguing that it is a community asset rather than a business facility, and should not be subject to VAT on construction.

The club had sought financial advice before starting work on the pavilion in Cassington Road, which burnt down in 2012 in a suspected arson attack, and had been assured it would not have to pay VAT.

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Her Majesty's Revenue and Customs (HMRC) hit them with the bill in 2015, however, and they appealed - but it has been dismissed after a second tribunal.

Club chairman Ian Miller said the club is now in a 'precarious' position given the hit to finances.

He said: "It's disappointing as a small, rural club to have outstanding debts like that.

"It's very complex but I think the bottom line is that we were probably always going to fail - I don't think we would have been allowed to win purely because of the implications for HMRC with other clubs throughout Britain in a similar position.

"We will have to pay back the money that was lent to us by friends and club members.

"We are working with ground equipment that is 30+ years-old. If something goes wrong, we can't possibly pay these loans and also buy equipment.

"Without equipment, we can't play cricket. It puts us in a very precarious position."

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The community raised £170,000 to pay for the new pavilion, and the club's plight was raised by then-Prime Minister and Witney MP David Cameron at the time, who wrote to HMRC and the chancellor.

In 2017 a tribunal ruled the club was 'not entitled to treat construction services supplied for the building of a cricket pavilion as zero-rated', but the club appealed again.

Results of the upper tribunal were published last week and reveal that the appeal has been dismissed.

A zero rating for VAT can apply to the construction of a building used for a 'relevant charitable purpose.'

The initial tribunal ruling found: "Although [the club] was established for a charitable purpose, namely the advancement of amateur sport, it was also established for a subsidiary purpose of providing social facilities to the residents of Eynsham.

"Such a subsidiary purpose was not a charitable purpose and consequently the club was not established for charitable purposes only."

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However, the new tribunal paper reveals that HMRC then 'conceded that the sole basis on which the tribunal had dismissed Eynsham Cricket Club's appeal, that is its decision in respect of the issue [was it established for charitable purposes only?] was wrong in law.'

The papers add: "The effect of that decision was that [the club] had effectively succeeded in its appeal."

However, HMRC argued against other aspects that the tribunal had decided in the club's favour, and took the appeal forward.

The upper tribunal has now concluded the club 'was not established for charitable purposes' adding: "We uphold the conclusion of the first-tier tribunal on different grounds."

The document revealed that the club's income is 'more or less equal to its expenditure' and 'it has not been liable to be registered for VAT at any relevant time.'

Mr Miller said the club dates back to the 1970s and construction on the new pavilion halted prior to completion, after the VAT bill surfaced.

He said: "It was just an internal shell, and members completed it - from fitting the kitchen to painting the whole building."