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Cricket club caught out by charitable VAT rules

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Westow Cricket Club was bowled a penalty of £20,937 for incorrectly interpreting the zero-rating rules on the construction of buildings used for charitable purposes. HMRC was also criticised by the FTT for not giving the club a definitive response to its query

17th Jan 2020
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The penalty was the equivalent to the VAT that should have been paid over to HMRC had a zero-rated certificate not been handed to Westow’s builder.

Asked for help

Westow is a local club run by members with no paid staff, but it is not a registered charity and therein lay the problem. It is a registered Community Amateur Sports Club (CASC) under the Corporation Tax Act 2010, s58.

Having raised funds to build a new pavilion and sports hall it wrote to HMRC seeking advice on the zero-rating of the construction costs.

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