Yorkshire village cricket club hails tribunal victory in nine-year battle over £20k tax penalty

An amateur cricket club run by village volunteers has hailed a victory over HMRC in a ‘David vs Goliath’ tax battle which nearly brought it to its knees.

Westow Cricket Club was handed a £20,000 penalty after inadvertently issuing the wrong VAT certificates for its new pavilion.

Westow Cricket Club, on the fringes of the Howardian Hills, was handed a £20,000 penalty after inadvertently issuing the wrong VAT certificates for its new pavilion.

Now the small club, which is reliant on members’ subs and refreshment sales, has emerged triumphant from a nine-year gruelling battle which took it through two tribunals.

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The club had been acting on guidance from HMRC, which has now accepted this as a ‘reasonable excuse’, and agreed it will pursue it no further.

Westow Cricket Club was handed a £20,000 penalty after inadvertently issuing the wrong VAT certificates for its new pavilion.

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Robin Kellock, pledging to deliver on promises of lemon drizzle cake to tax advice teams with a win, said the club had fought as a matter of principle.

“We’d worked so hard to secure the grants and funding needed to deliver the pavilion to the cricket club and local community, so it was very frustrating to have this legal battle hanging over us for so long,” said the volunteer. “Luckily, our barrister proved that we acted as any other reasonable body would do, and the court finally found in our favour.

“We now move on, and are looking forward to a busy summer of cricket.”

The case centred around the club’s new pavilion, which is used for community events in the village of Westow in Ryedale.

Tribunals

Approaching HMRC, volunteers had asked if they were able to issue a zero-related VAT certificate as a Community Amateur Sports Club (CASC) to meet its construction costs.

They had acted on a response that it appeared to qualify, raising enough funds to cover the cost of the project, but were then hit with a penalty of £20,937.

HMRC later said that its advice would only apply had the club been a registered charity, contesting at tribunal the letter was not ‘definitive’ and should not have been relied upon.

A first tier tribunal ruled against the club, but with the help of tax dispute firm Independent Tax and Michael Firth, Counsel of Gray’s Inn Tax Chambers, the club appealed again.

At this latest upper tribunal hearing, the club has been successful in its argument that it not only had a reasonable excuse but also that penalties infringed on human rights for proportionality.

'Expensive' case

Gary Brothers, managing partner of Independent Tax, said volunteers had faced the “wrath of HMRC’s investigative arm”, adding: “You really couldn’t make it up.

“It has evidently been an expensive case for HMRC to take such a principled view of, and significant amounts of taxpayers’ money will have been used to fund this ultimately unsuccessful defence.”

An HMRC spokesperson said: “We are disappointed with the outcome of the Upper Tribunal, however we accept the decision that the club had a reasonable excuse for claiming VAT relief and will not pursue this case further.”

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