Bletchingley Church House Charity v The Commissioners for HMRC
Decision date: 29 June 2022
Neutral citation: [2022] UKFTT 211 (TC)
Overall AI summary confidence: high
Short overview
This short overview is intended to summarise the case, issues and outcome so far as they are supported by the judgment.
AI confidence in this short overview: high
Bletchingley Church House Charity (BCHC) appealed HMRC's refusal to repay £87,002.75 VAT claimed as zero‑rated under Item 1(a)(ii), Group 5, Sch. 8 VATA for refurbishment works to Church House prior to granting a long lease to a non‑charitable company (BCHAL). The Tribunal found the works were refurbishments (not excluded as new construction) but that the building was not intended for use "solely" for a relevant charitable purpose because BCHAL was not a charity, the lease was at a commercial rent, and lettings to the public (under 95% charitable hirers) were commercial. The zero‑rating did not apply and the appeal was dismissed.
Ratio decidendi
This summary is intended to identify the ratio decidendi, meaning the legal reasons for deciding and the binding part of the decision.
AI confidence in this ratio decidendi summary: high
The Tribunal's ratio is that Item 1(a)(ii), Group 5, Sch. 8 VATA requires the building to be intended for use solely for a “relevant charitable purpose” (Note 6), which necessitates charitable use otherwise than in the course of a business; where the first grantee is not a charity and the grant/lettings are commercial (including a commercial rent and public lettings with less than 95% charitable users), that sole-charitable-purpose requirement is not satisfied and zero‑rating fails. Also, where Note 12 requires certification of intention, a non‑charitable recipient cannot validly provide such a certificate.
Obiter dicta
This summary is intended to identify obiter dicta, meaning observations made by the way that were not necessary to deciding the case and are not binding.
AI confidence in this obiter dicta summary: medium
The Tribunal made subsidiary observations on witness credibility and consistency, noted the absence of a management agreement between BCHC and BCHAL, and commented that local advertising or local shareholding alone does not prove use confined to the local community or that hirers are charitable; it also noted the 5% de minimis allowance for non‑charitable use but found BCHC had not established 95% charitable usage.