Hockey club toasts victory in UK tax battle

A hockey club that clashed sticks with Revenue & Customs over a £480 ($832) tax bill was toasting victory on Thursday night after a five-year legal battle that ended up in Europe’s highest court.

Members of Canterbury Hockey Club in Kent refused to accept that they owed value added tax on fees paid to England Hockey, the sport’s governing body.

Despite the minimal sum of money at stake, the Revenue chose to fight the case all the way to the European Court of Justice in Luxembourg.

Tax officials were left counting the legal – and reputational – costs of the wrangle, after the court backed Canterbury’s claim that such membership fees should be exempt from VAT.

While the impact on the Treasury’s coffers is expected to be relatively limited, it is another black eye for a government department whose choice of legal battles is often criticised.

Observers said the Canterbury case had echoes of the Revenue’s 12-year fight with Marks & Spencer, the retailer, over the tax classification of chocolate-covered teacakes.

The Revenue lost a similarly esoteric battle this year with Procter & Gamble over whether the consumer goods group’s Pringles snack food contained enough potato to be called a “crisp”.

The Revenue first applied to have the Canterbury hockey case dismissed more than three years ago, on the ground that the club did not have enough money at stake to continue with its appeal. The VAT and Duties Tribunal threw the argument out, laying the groundwork for Thursday’s judgment.

Graeme Macdonald, the club member who has argued Canterbury’s case at every stage, told the FT that he was “delighted” with the decision but surprised at the length of the fight.

The Canterbury hockey club is one of the largest in the country, with 10 men’s sides and five ladies’ teams.

England Hockey charges each of the club’s teams £165 plus VAT in “affiliation” fees, and provides services such as player training, match umpires and the arrangement of national leagues and competitions.

Canterbury successfully argued that the fees should be exempt from VAT on the ground that they were for services supplied in connection with sport under European law.

The Revenue said the government was still studying the implications of the decision. The case will now return to the High Court for final determination.

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