FFW overturns HM Revenue & Customs policy on VAT relief for charitable imports
30 August 2005
Field Fisher Waterhouse (FFW) has successfully overturned HM
Revenue & Customs (HMR&C) policy on VAT relief for
charitable imports, allowing GIA London, a UK registered charity
which educates and trains students in gemmology, to import donated
gemstones and equipment from a US affiliate body free of VAT.
Tax partners Graeme Nuttall and Nick Beecham advised GIA
London.
FFW applied on behalf of GIA London for confirmation that the
donated gemstones and equipment that they are importing qualify for
VAT relief, as provided by HMR&C Notice 317. The relief
applies to goods donated by a person established abroad to a
charity for the purposes of carrying out its charitable aims.
HMR&C refused to give the relief, insisting that their policy
was only to grant the relief where the goods were imported for the
benefit of needy persons and would not say what authority they were
claiming in support of this additional restriction upon the
relief.
FFW, on behalf of GIA London, appealed to the VAT Tribunal, but
it took HMR&C a year to file its statement of case. When
it was eventually filed, it acknowledged that GIA London qualified
for the relief under the terms of both the UK and EC
legislation. However, it indicated that the origin of this
particular relief was neither UK nor EC legislation, but rather
Paragraph 29, Annex B.2 of the Kyoto Convention which does, indeed,
contain a reference to needy persons. FFW pointed out to the
HMR&C Solicitor's Office that the Kyoto Convention does not
have direct effect in UK law in the same way as EC legislation and
so cannot override a relief provided in UK and EC
legislation. Furthermore, Article 2 of the Kyoto Convention
makes it clear that it is prescribing minimum reliefs that
contracting states must grant and actually encourages contracting
states to grant greater reliefs. HMR&C withdrew their
opposition to GIA London's case. They now accept that a
charity can import donated goods free of VAT and that there is no
additional requirement that the goods are for the benefit of needy
people.
For further press information, please contact:
Ben Girdlestone, Communications Manager, on +44 (0)20
7861 4968
Louise Eckersley, PR Executive, on +44 (0)20 7861 4120