In Ethical Trading Initiative v HMRC (TC00690 – 12 October) the ETI had been established in 1998 as a company limited by guarantee to ‘promote and encourage ethical trading in order to improve conditions for workers and their communities in the supply chains of companies supplying products in the UK market’. It registered for VAT in 1999 and charged VAT on the subscriptions paid by its corporate members. In 2007 HMRC issued a ruling that these subscriptions were exempt under VATA 1994 Sch 9 Group 9 Item 1(e) (so that ETI’s corporate members could not reclaim input tax on them). ETI appealed contending inter alia that it should not be treated as falling within Item 1(e) since its objects were not ‘in the public domain’. The Tribunal rejected this contention and dismissed the appeal.
Why it matters: This is a somewhat unusual case. In most cases...
