Village cricket club officials who asked former prime minister David Cameron for help after becoming involved in a £35,000 VAT dispute with the taxman have lost the latest round of a legal battle.
Eynsham Cricket Club, in Oxfordshire, argued that it should not have to pay VAT, on top of money spent building a new pavilion, because it was a “charity” – tax officials disagreed.
Three Court of Appeal judges have ruled in favour of HM Revenue & Customs.
They said the ruling would have implications for other sports clubs.
Appeal judges said the issue was whether the club was entitled to have construction services supplied on a “zero-rated basis” because it was a “charity” for the purposes of VAT legislation.
The club had challenged a 2019 ruling, by tribunal judges, that it was not a “charity”.
Lord Justice Henderson, Lord Justice Singh and Lady Justice Simler, who heard argument at a Court of Appeal hearing in January, on Tuesday upheld the tribunal ruling and dismissed the club’s appeal.
Appeal judges heard that the club had spent about £175,000 on “construction services” and been handed a VAT bill of about £35,000.
Mr Cameron’s Witney constituency had included Eynsham, when he was a Conservative MP and prime minister, and club officials had asked him for help after being handed the bill in 2015.
Club secretary Allen Stevens said on Tuesday, after the appeal court ruling, that officials had yet to decide whether to ask the Supreme Court to consider the case.
“We did ask Mr Cameron if he could help, when he was our MP and prime minister, after we were told we would have to pay the bill,” said Mr Stevens.
“He took it with Treasury officials, but nothing came of it.”
Mr Stevens added: “The club is still going, but we had to borrow the money to pay the VAT bill and are still paying off that loan.”
Lady Justice Simler said, in a written ruling, said judges had considered whether supplies of construction services to “community amateur sports club”, such as Eynsham Cricket Club, qualified for zero-rating for the purposes of VAT.
Tribunal judges had concluded that, as a community amateur sports club, Eynsham, was to be treated as “not established for charitable purposes” and “hence could not be a charity”.
Lady Justice Simler said she agreed with the conclusions reached by tribunal judges – that the club could not “be a charity” for the purposes of legislation and could not “obtain the benefit of zero-rating on the supply of the relevant construction services”.
She added: “The amount at stake on this appeal is modest though important to the club, but the point of principle raised has wider significance for other cases involving local and community-based sports clubs.”
Lord Justice Henderson and Lord Justice Singh said they agreed with Lady Justice Simler’s analysis.
Appeal judges heard that Eynsham’s pavilion had been re-built after being destroyed by fire, in a suspected arson attack, in 2012.