Upper-tier tribunal rules United Grand Lodge of England did not satisfy criteria to gain VAT exemption
THE UNITED GRAND LODGE OF ENGLAND has had its appeal for exemption from VAT thrown out by the upper-tier tax tribunal.
The Freemasons’ original case before the first-tier tribunal was that its aims were philosophical, philanthropic or civic in nature and that therefore, the exemption from VAT applied. The first-tier tribunal concluded it did not, and dismissed the claim, but in 2014 the lodge was granted leave to appeal.
The court accepted the organisation is a non-profit making institution whose supplies “were in its members’ common interest in return for subscriptions fixed in accordance with its rules”.
But the lodge contended that the first-tier tribunal should have been satisfied on the evidence that its aims were predominantly qualifying aims and that the aims of fraternity, self-improvement and mutual care were merely incidental to its philanthropic, philosophical and civic aims.
It also argued the first-tier tribunal erroneously concluded that the charitable spending of the masonic charities “might to some extent be analogous to that of a mutual insurance company” and therefore, was not wholly philanthropic.
The upper-tier tribunal upheld the first-tier’s findings in all its aspects, with judge Justice Asplin noting the first tier “did not err in law”.
In summing up, she added: “I can see no error in the way in which the FTT inferred from the way in which charitable donations were applied that not all of [the lodge’s] promotion of charitable giving has a philanthropic aim. Given that around 75% of charitable spending is directed to masons or their dependants when taken together with the evidence recorded at that the interests of family are paramount, in my judgment it cannot be said that their decision is perverse.
“The brochure refers to masonry consisting of ‘a body of men brought together for the sake of mutual intellectual social and moral improvement’ and gave ‘self-improvement’ as a reason for becoming a mason. It seems to me therefore that it cannot be said that the first-tier’s conclusions were without foundation on the evidence or were perverse.”