In Aberdeen Sports Village Ltd v HMRC (TC01776 – 7 February) a company was formed in 2007 to operate a sports facility in Aberdeen. It received grants from Aberdeen City Council and Aberdeen University and treated these grants as outside the scope of VAT. HMRC issued an assessment on the basis that the grants were consideration for supplies of services by the company. The tribunal upheld the assessment and dismissed the company’s appeal finding that the grant funding was ‘not a donation and is a consideration for services rendered’.
Why it matters: The Tribunal upheld HMRC’s view that the funding which the company received was consideration for services so that VAT was chargeable and rejected the company’s view that its funding should be treated as non-taxable donations.
