Council successful in £1.5m VAT repayment claim

St Helens Council
St Helens Council
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St Helens Council has been successful in a £1.5m VAT repayment claim, it has been revealed.


The claim relates to VAT that was incorrectly charged by local authorities on supplies of closely linked and essential services to sport to individuals taking part in that sport.

The council’s latest budget and performance monitoring report says that historically, it has accounted for output tax on leisure services to HM Revenue and Customs (HMRC).

However, a ruling in the case of London Borough of Ealing v HMRC opened the door for local authorities to claim back VAT.

In 2013, London Borough of Ealing submitted a VAT refund claim to HMRC, which was rejected, arguing its supplies were exempt from VAT.

The claim was escalated to the UK’s First Tier Tax tribunal and was duly referred by the UK courts to the Court of Justice of the European Union, which ruled in London borough of Ealing favour in 2017.

“Following the decision of the Court of Justice for the European Union in London Borough of Ealing, HMRC accepts that certain supplies of sporting services made by local authorities can be treated as exempt from VAT,” HMRC said following the ruling.

St Helens Council’s budget and performance monitoring report confirms the authority submitted a claim to HMRC for a £1.47m repayment of VAT.

“The claim was subsequently accepted by HMRC, and the council has been notified that it is due a net sum of £1.47m for the period December 2011 to March 2018,” the report says.