In a recent case – Halle Concert Society, TC05067 – the First Tier Tribunal (FTT) has held that members paid their subscriptions to the taxpayer in return for a single supply of a package of the rights and benefits arising from membership, which fell within the philanthropic exemption.

The taxpayer had previously submitted a claim for repayment of output tax, which it had accounted for in relation to members’ subscriptions, contending that they did not amount to consideration for any supply and were outside the scope of VAT. This claim had been refused by HMRC.

The FTT ascertained that the taxpayer was indeed wrong on that count, and that there was a single supply of a package of the rights and benefits arising from membership, which included the corporate rights, the priority booking rights, the publications and other benefits. That supply was within the scope of VAT and taxable. The FTT was also satisfied, however, that the organisation had aims of a philanthropic nature throughout the period of the claim and, as such, this supply fell within the philanthropic exemption. The appeal was therefore upheld in favour of the taxpayer.

CTG’s technical adviser, Graham Elliott, has commented on the decision and its implications for the philanthropic exemption.

The Charity Tax Map has more information about VAT considerations for membership subscriptions.