The card game bridge should be categorised as a sport and players should not be charged VAT to enter competitions, a top lawyer advising the European Court of Justice (ECJ) has ruled. Nick Huber and Tom Herbert investigate.
One of the ECJ’s top advisors has said he believes duplicate contract bridge requires “considerable mental effort and training,” and that sport must be interpreted as an activity in the public interest.
Giving his verdict in a non-binding but persuasive opinion, advocate general Maciej Szpunar said that to be classified as a sport it is not necessary for an activity to have a particular physical element.
“It is sufficient that the activity has a significant mental element which is material to its outcome,” said Szpunar.
Long-running suit
The case was heard because of a dispute between the English Bridge Union (EBU) and HMRC after the EBU claimed it should be allowed to reclaim money for sporting supplies under the VAT Directive.
HMRC asserts that bridge is not a sport because it does not require significant physical activity, exertion or skill, and bridge players are currently charged VAT on entry fees to tournaments.
The issue was first brought to the courts in 2014 and raised to ECJ level after the EBU appealed the decision of judges at the First-tier Tribunal not to grant bridge a VAT exemption.
Szpunar was responding to a request for a preliminary ruling from the UK’s Upper Tribunal, which had sought guidance on the intentions of the VAT directive.
EBU comes up trumps
The EBU said it was pleased with the advocate general’s opinion.
“This is a non-binding recommendation, but if confirmed later this year … the EBU would no longer need to charge VAT on entry fees to its competitions, and would receive a rebate on VAT which it had previously paid,” said an EBU spokesperson.
The ruling has wider ramifications for other ‘mind sports’, including chess. Malcolm Pein, international director of the English Chess Federation told the Telegraph the verdict had “implications for VAT exemption”, but also gives other mind sports a chance to further lobby Sport England for additional funds.
A bridge too far?
Reacting to the recommendation VAT expert and AccountingWEB contributor Les Howard said: “It is interesting that the AG has said that a sport does not have to include a certain 'physical element,' but that a 'significant mental element' is sufficient. Does this bring within the exemption crosswords and tiddly winks? I think HMRC will not like such a wide definition, if the court upholds this opinion.”