20739
VALUE ADDED TAX  exemptions — VATA 1994, s 31, Sch 9 Group 9 Item 1(e), Group 10 Item 3, VAT Directive art 132(1)(l), (m) — Appellant promoting shooting and conservation, and undertaking various other activities of public benefit — whether activities political, philanthropic or civic — yes, but only subsidiary aims of that character and test to be made by reference to principal aims — whether supplies “closely linked” with sport — no — appeal dismissed

MANCHESTER TRIBUNAL CENTRE

	THE BRITISH ASSOCIATION FOR SHOOTING
	AND CONSERVATION LIMITED	Appellant

	- and -

	THE COMMISSIONERS FOR			HER MAJESTY’S REVENUE AND CUSTOMS	Respondents

Tribunal:	Colin Bishopp (Chairman)

Sitting in public in Manchester on 23 April and 9 May 2008

Richard Barlow, counsel, instructed by Baker Tilly, for the Appellant
Richard Chapman, counsel, instructed by the Solicitor and General Counsel for HM Revenue and Customs, for the Respondents

© CROWN COPYRIGHT 2008

DECISION
Introduction
1.	The British Association for Shooting and Conservation Limited (“BASC”) came into existence in 1908 as the Wildfowlers’ Association of Great Britain and Ireland, merged with the Gamekeepers’ Association of the United Kingdom in 1975, changed its name to its present title in 1981 and was incorporated under the Industrial and Provident Societies Act 1965 in 1997. Its constitution provides that its objects are to:
“(a)	Act as a representative national body for all sporting shooting.
(b)	Promote and safeguard sporting shooting.
(c)	Aim at the responsible unification, guidance, education and representation of all engaged in such sport together with the promotion of conservation and scientific research into all aspects of the quarry species and other matters connected with such sport in accordance with the ethics of good sportsmanship.
(d)	Uphold and maintain the legitimate interest of its members in such a manner as this Association … shall decide, in particular with regard to:-
(i)	proposals to restrict by legislation the use of sporting firearms
(ii)	the lawful right of every member to shoot at sporting quarry …”
2.	The issue in this appeal is the correct VAT treatment of BASC’s subscription income. It is agreed that a part of each subscription is attributable to the zero-rated supply of magazines, and another part to the exempt supply of making insurance arrangements. The parties are unable to agree on the treatment of the remainder (the “residual subscription income”). BASC contends that it too is the consideration for an exempt supply; the Commissioners that it is the consideration for a standard-rated supply. It seemed to me probable that the residual subscription income is the payment for a bundle of supplies, but neither party suggested that they should be identified, segregated and treated separately, and I shall treat the bundle as a single supply, whether or not composite. 
3.	In 1994 the Commissioners made a ruling that the supply was exempt but in 2006 they changed their minds, and told BASC it must treat the residual subscription income as the payment for a taxable supply in future. BASC disagreed, and declined to do so. On 27 April 2007 the Commissioners made an assessment, in the total amount of £397,551, for the tax due on BASC’s subscription income for the year 2006 upon the assumption that their revised view is correct, and it is against that assessment that BASC has appealed. I am required to deal with the issue of principle and not with the arithmetic of the assessment. It relates only to BASC’s output tax liability and the Commissioners accept that there will need to be a consequent input tax adjustment should their view prevail.
4.	Section 94(2) of the Value Added Tax Act 1994 provides that “the provision by a club, association or organisation” [a description which includes BASC] “(for a subscription or other consideration) of the facilities or advantages available to its members” is deemed to be the carrying on of a business, but says nothing about the treatment for VAT purposes of the “facilities or advantages”. BASC’s case that the supply for which the residual subscription income is the payment is exempt depends on its falling within item 1 of Group 9 to Schedule 9 to the Act, or, if that argument fails, on its falling within item 3 of Group 10 to the same Schedule. The Commissioners contend that neither provision is of any application. 
5.	Schedule 9 to the 1994 Act sets out a list of the supplies which, by virtue of section 31, are exempt. Item 1 of Group 9, which is headed “Subscriptions to trade unions, professional and other public interest bodies”, in the version in which it was in force throughout 2006, is as follows:
“1	The supply to its members of such services and, in connection with those services, of such goods as are both referable only to its aims and available without payment other than a membership subscription by any of the following non-profit-making organisations—
(a) to (d) [immaterial]
(e)	a body which has objects which are in the public domain and are of a political, religious, patriotic, philosophical, philanthropic or civic nature.”
None of the Notes to the Group is of any relevance.
6.	Item 1 is designed to implement in United Kingdom law the requirements of what was formerly article 13A1(l) of the Sixth VAT Directive (77/388/EEC) and is now article 132(1)(l) of the Council Directive of 28 November 2006 on the common system of value added tax (the Common System Directive). The provision as it was in force in 2006 (the replacement provision is for practical purposes identical) required member States to exempt the:
“supply of services and goods closely linked thereto for the benefit of their members in return for a subscription fixed in accordance with their rules by non-profit-making organisations with aims of a political, trade-union, religious, patriotic, philosophical, philanthropic or civic nature, provided that this exemption is not likely to cause distortion of competition”.
7.	Save for one reservation to which I shall come, BASC does not argue that domestic legislation fails to implement the Directive properly. It is agreed that BASC is a non-profit-making organisation, and that none of its activities is of a trade union, religious, patriotic or philosophical nature. The parties disagree about whether they can properly be described as political, philanthropic or civic, and about whether they are “in the public domain”. Neither party suggested that the distortion of competition is a material consideration in this case.
8.	Item 3 of Group 10 brings within the exemptions:
“The supply by an eligible body to an individual, except, where the body operates a membership scheme, an individual who is not a member, of services closely linked with and essential to sport or physical education in which the individual is taking part.”
Again, none of the Notes to the Group is of relevance.
9.	Item 3 is the reflection in domestic law of the requirement of article 13A1(m) of the Sixth Directive (now article 132(1)(m) of the Common System Directive) that member States exempt:
“certain services closely linked to sport or physical education supplied by non-profit-making organisations to persons taking part in sport or physical education.”
10.	Again, BASC has some reservations with which I shall deal later about the correctness of the domestic legislation’s implementation of the Directive. It is, however, common ground that BASC is an eligible body (a term which, for present purposes, can be treated as synonymous with non-profit making organisation) and that it operates a membership scheme. The Commissioners also accept that the shooting of game is a sport. Their disagreement with the second of BASC’s arguments is based on their contentions that its activities are not “closely linked with” or “essential to” sport, and that some of the services it offers are available to non-members.
The evidence
11.	There was little dispute about most of the facts of the case—only one of BASC’s two witnesses was cross-examined, and the Commissioners relied on a single witness (the assessing officer) whose statement was not challenged and who accordingly gave no oral evidence. I shall therefore deal with the evidence as briefly as possible. 
12.	BASC’s chief executive is John Swift. He told me about BASC’s history (which I have summarised above), its activities and his own role within it. Membership is open to all, and is available in several categories. A full member has all the privileges of membership; others may choose restricted membership. Some members are entitled (for example on age grounds) to pay a reduced membership fee. Some hold dual membership, once directly and again indirectly by virtue of their being a member of a local club or shooting syndicate which, as a condition of affiliation to BASC, is required to take up membership of BASC for each of its own members. At the end of 2007, BASC had about 130,000 members. It has also a number of “supporters” who are not regarded as members and have no voting rights but who pay a small annual subscription in return for one of its periodicals. BASC’s subscription income in 2007 amounted to about £5.6 million; it generated a further £1 million from donations, legacies, grants, fundraising events and commercial activities.
13.	Most of BASC’s staff of about 100 have relevant qualifications (such as in biology or ballistics), some being acknowledged experts in their fields. That expertise is drawn on not only for the members’ benefit but also in the context of BASC’s wider activities. Further knowledge and expertise is available from BASC’s regional volunteer network. 
14.	From the individual member’s perspective, the principal benefits of membership are the periodicals, the insurance cover arranged by BASC, its members’ advisory service and its representation of the sport. There are three periodicals, directed at different readerships though all with interests in sporting shooting. The insurance arranged by BASC covers its shooting members for claims arising from accidents and for some other risks. As there is no dispute about the tax treatment of the proportions of the subscriptions attributable to those supplies I shall say no more about them. The advisory service (by which members, but not others, may enquire about such matters as the choice of a suitable firearm, and may obtain guidance on applying for a firearms certificate) is used, Mr Swift said, by only about ten per cent of members and it therefore does not amount to a major activity, but I am satisfied that it is provided on a regular basis and in a business-like manner. The greater part of the residual subscription income, accordingly, is devoted to BASC’s less easily defined activities. These include the publication of a great deal of information, including advisory information, on BASC’s website, which is publicly available and not restricted to members, representation of its members’ interests, and what can loosely be called public activities. 
15.	Mr Swift agreed that BASC’s primary purpose is to act as a representative body for those engaged in sporting shooting. That purpose is reflected in BASC’s “mission statement”, published on its website:
“Our mission is to promote and protect sporting shooting and the well-being of the countryside throughout the United Kingdom and overseas. We represent our members’ interests by providing a voice for sporting shooting which includes wildfowling, game, and rough shooting, deer stalking, target shooting and air gunning, pigeon shooting and pest control, gun dogs, promoting practical habitat conservation, training and the setting of standards and undertaking appropriate research.”
16.	However, he said, the primary purpose is qualified by other objectives, as the mission statement itself indicated. Conservation (a word which, of course, appears in BASC’s title) is important not only for the obvious reason that if there is insufficient game and suitable terrain those engaged in the sport will have nothing to shoot and nowhere to shoot it, but for its own sake; it is in BASC’s members’ interest that the countryside should be preserved and it is of great importance, too, that the sport should have a good reputation. BASC is also engaged extensively, he said, in providing advice and assistance to government and public bodies, as well as political parties, about a number of matters connected with conservation, shooting, the use of firearms and animal welfare.
17.	I am satisfied from Mr Swift’s evidence and from the extensive range of BASC publications he produced that conservation, which he coupled with land management, is one of BASC’s major activities. It is extensively engaged, with bodies such as the Crown Estate and environmental agencies for the constituent countries of the United Kingdom, in a large number of conservation and land management projects throughout the UK. While its activities are not exclusively altruistic—BASC evidently always has in mind its primary role as an organisation supporting those engaged in sporting shooting—it was clear to me from Mr Swift’s evidence that much of what it does in this sphere is not exclusively for the immediate benefit of its own members but for the advantage of all (though including its own members) who take an interest in the preservation of the countryside, irrespective of their wish to pursue game, and is correspondingly of public benefit. Some activities are designed to protect non-game species, or to control pests otherwise than by shooting; other activities are directed to the preservation of, for example, woodland which may or may not be a habitat for game.
18.	It was apparent too that BASC performs an important public education role, in that it has close links with the Association of Chief Police Officers (ACPO), the Department for the Environment, Food and Rural Affairs (DEFRA) and the Home Office, and is closely involved in the formulation of public policy about the licensing, safe use and control of firearms, and that its advice on such matters is actively sought by ACPO and the Home Office. I was shown a number of leaflets produced jointly by BASC and ACPO relating to the licensing and safe use of firearms. BASC has also participated with ACPO in programmes dealing with inner-city gun crime, a matter of only indirect relevance to BASC’s members. Similarly BASC advises and cooperates with DEFRA on matters of environmental protection and animal welfare. Again, Mr Swift produced an impressive quantity of documentation amply evidencing BASC’s contribution to government and similar initiatives.
19.	Much of Mr Swift’s time, he told me, was spent in Europe since he, as BASC’s chief executive, was asked by the UK government to represent it in various discussions and negotiations with other member States of the European Union. I am satisfied that this is viewed, correctly, by BASC as an important activity and that, although it undoubtedly does benefit its members, it also confers benefits on the community at large.
20.	In fact, Mr Swift said, he spent so much of his time in Europe that he was unable to deal personally with many of BASC’s public activities in the United Kingdom, and they were the responsibility instead of its director of communications, Christopher Graffius. Mr Graffius has a background in political campaigning and I have no doubt that he considered it an important part of his role to represent the interests of BASC’s members, but I am equally satisfied from his evidence, which was not challenged, that he spends a great deal of his time on activities which are of wider public benefit, including advising central and local government, public bodies such as ACPO and conservation authorities, and political parties. By this means BASC has some influence on legislative changes, not always of direct relevance to sporting shooting.
21.	From that evidence I am satisfied that, while BASC is an organisation whose primary purpose is the protection and advancement of its members’ interests, and that it cannot divorce any of what it does from that primary purpose, it conducts itself in a thoroughly responsible and public-spirited fashion, has rightly earned the respect of government and similar bodies, and does not seek to advance its members’ interests at all costs but only when they coincide with, or at least do not conflict with, the public interest. I am, in particular, satisfied that BASC is rather different from a conventional campaigning organisation or pressure group.
22.	As the assessment is no more than the means by which the dispute between the parties has been brought to the tribunal, I need say nothing about the assessing officer’s evidence save to remark that the assessment was properly raised if the Commissioners’ views are correct, and BASC did not suggest the contrary. 
23.	Before coming to the parties’ arguments I should deal with a matter of law which was not contentious. Although there might, at first sight, be room for doubt whether some of BASC’s activities amount to supplies to its members, as Item 1 requires if it is to apply, that question was resolved by the Court of Appeal in Customs and Excise Commissioners v British Field Sports Society [1998] STC 315. The society in that case was in some respects similar to BASC, in that it aimed to protect its members’ right to pursue field sports, and lobbied and campaigned in support of those aims. The Commissioners argued that the lobbying and campaigning were not to be regarded as supplies while the society argued that, by virtue of what is now section 94(2) of the VAT Act 1994, they were deemed to amount to the carrying on of a business and therefore met the criteria of a supply. This tribunal, the High Court and the Court of Appeal all accepted the society’s argument, and additionally held that there was a direct link between the members’ subscriptions and the campaigning activities. It seems to me that BASC’s activities of advising government and similar bodies are to be viewed in the same way, that is there is a direct link between the residual subscription income and those activities.
The parties’ arguments
24.	Richard Barlow, counsel for BASC, laid some emphasis on its registration under the Industrial and Provident Societies Act 1965. The conditions which must be satisfied if a body is to be registered under that Act are set out in section 1 which, as amended, reads:
“(1)	Subject to sections 2(1) and 7(1) of this Act, a society for carrying on any industry, business or trade … may be registered under this Act if—
(a)	it is shown to the satisfaction of the Financial Services Authority that one of the conditions specified in subsection (2) of this section is fulfilled; …
(2)	The conditions referred to in subsection (1) (a) of this section are—
(a)	[immaterial]; or
(b)	that, in view of the fact that the business of the society is being, or is intended to be, conducted for the benefit of the community, there are special reasons why the society should be registered under this Act rather than as a company under the Companies Act 1985.”
25.	 The fact that the predecessor of the Financial Services Authority (BASC was registered before the FSA came into existence) was satisfied that BASC met the requirements of subsection (2)(b) was, he said, strong support for the view that it was also a body which fell within Item 1(e) of Group 9 since there was a close correlation between the two provisions.
26.	It was, he said, clear irrespective of the nature of its registration that some at least of BASC’s objects came within Item 1(e), as being political, philanthropic or civic in nature. It was not necessary that all the objects were of one or other of those descriptions; the wording of paragraph (e) required no more than that some of the objects of the organisation in question were of one or more of the various categories listed. There could equally be no requirement that the objects fell within all of the categories, since they were of disparate kinds. The use of the phrase “in the public domain” was surprising, partly because it was usually taken to mean “generally known” whereas in this context it must mean “in the public interest”, and partly because there was no warrant in the Directive for the introduction of any such additional requirement. Since the Directive was in mandatory terms I should disregard the additional requirement if its application meant that the Directive was not correctly implemented; but that should not be necessary since, he said, BASC had objects, and undertook activities, which were indeed in the public interest.
27.	Although some of BASC’s activities were of no obvious immediate benefit to its members individually, neither that fact nor speculation about what the members hoped to achieve from their membership were a guide to its aims and objects. In The Game Conservancy Trust v Customs and Excise Commissioners [2001] V & DR 422 the tribunal was required to consider the VAT treatment of the members’ subscriptions to an organisation which, as its name implies, was concerned with the conservation of game. The tribunal concluded that the objects were to be derived from the body’s constitution rather than from its members’ motives. Here, the constitution contained objects some of which (the conservation of wildlife), as the tribunal also decided in Game Conservancy Trust, were of a philanthropic nature since they were of benefit to the general community and not merely to the members. Mr Barlow also pointed out that, in Game Conservancy Trust, it was accepted, apparently without argument, that the activities in question were in the public domain.
28.	For his second argument, that the supplies fell within Item 3 of Group 10 if they did not fall within Item 1 of Group 9, Mr Barlow relied on the Commissioners’ acceptance that shooting amounts to a sport, and that BASC is an eligible body, but disputed their view that the relevant supplies must be made to the members while they are actually taking part in the sport. That view, he said, was inconsistent with the wording of the Directive, “services closely linked to sport … to persons taking part in sport” which did not imply the contemporaneity for which the Commissioners argued. The domestic provision adopted different wording but it could and should be interpreted so as to conform with the less strict test laid down by the Directive. If that were done, it was plain that BASC’s supplies to its members were made to “persons taking part in sport”, as the Directive required, and that they were exempt from VAT.
29.	For the Commissioners, Richard Chapman of counsel relied on the comment by the tribunal in Game Conservancy Trust, at paragraph 65, that “if on examination of the evidence it transpires that the body has some other underlying aim or object that is more substantial than its stated aim, the body will be excluded from the exemption”. It was, he said, necessary to look objectively at BASC’s objects and determine what they truly were; the mere fact that one, minor, object of several fell within the exempting provision was not enough. It was also not enough that political, philanthropic or civic benefits were merely incidental to the true object. The evidence here showed that BASC’s primary aim was the advancement of its members’ shooting interests; everything it did, however much it might confer benefits on the community at large, was undertaken for that purpose. So much was apparent from the objects as they were set out in its constitution, from its mission statement and from Mr Swift’s evidence. This case could be distinguished from Game Conservancy Trust because, there, the trust took a neutral stance about shooting; here, BASC’s raison d’être was the promotion of shooting. 
30.	There was nothing in Mr Barlow’s argument that the requirement of the domestic legislation that the objects be in the public domain added something to the Directive since, in Institute of the Motor Industry v Customs and Excise Commissioners (Case C-149/97) [1998] STC 1219, at paragraph 18 of its judgment, the European Court of Justice said 
“It must also be remembered that the aim of art 13A of the Sixth Directive is to exempt from VAT certain activities which are in the public interest. As the court has stressed on several occasions … that provision does not provide exemption for every activity performed in the public interest, but only for those which are listed and described in great detail.”
31.	BASC’s objects are not in the public domain since any benefit conferred on the public is merely incidental to the true object of the organisation, and is not an aim in itself. It may well be that BASC assists government and similar organisations, that it promotes responsible shooting, advises the police about gun control and is heavily and actively involved in many conservation projects, but all of those activities are pursued for the better advancement of its primary purpose of promoting, for its members’ benefit, the sport of game shooting. It was, he said, arguable that BASC’s registration under the 1965 Act was erroneous, though that is not, of course, a matter for this tribunal.
32.	His argument in opposition to the claim that BASC’s supplies fell within Item 3 of Group 10 was based less on the proposition that the supplies must be made to persons contemporaneously participating in the sport (though he did not abandon the argument) than on the contention that what BASC supplied to its members was not essential to sport, since shooting could be undertaken without membership of a representative body such as BASC, and representation of shooters’ interests to government and others, beneficial though it might be, was not essential to the pursuit of the sport.
Conclusions
33.	It is a well-known requirement that exemptions are to be construed strictly: see Stichting Uitvoering Financiële Acties v Staatsecretaris van Financiën (Case 348/87) [1989] ECR 1737; but not artificially so: see Muys’ en De Winter’s Bouw- en Aannemingsbedrijf BV v Staatsecretaris van Financiën (Case C-281/91) [1997] STC 665 at paragraph 13. I bear those principles in mind in approaching the facts of this case and the parties’ arguments.
34.	I agree with Mr Barlow that BASC’s registration under the 1965 Act is a factor to be taken into account, despite Mr Chapman’s reservation about the appropriateness of that registration, though I do not think a great deal of weight can be attached to it since the provisions and requirements of that Act differ from those I must consider. All that can be said, I think, is that BASC has satisfied another body that its business is, in the words of section 1(2)(b) of that Act, “conducted for the benefit of the community”, but that is not the test I must apply in this appeal.
35.	I accept Mr Barlow’s argument that the phrase in paragraph (e) of Item 1 to Group 9, “has objects” is inconsistent with the notion that they must be exclusively of the types listed thereafter. But that is not to say that all one has to do, to secure exemption, is to identify one object, however minor it may be in relation to the organisation’s other objects, which falls within one of the listed categories; in that I agree with Mr Chapman. In my judgment it is apparent from reading the whole of the relevant part of the Item as I have set it out above that what is meant is that the primary object or objects of the organisation must fall within one or more of the categories listed. That conclusion seems to me to be what, in essence, the tribunal decided in Game Conservancy Trust. Mr Barlow did not suggest that the decision in that case was wrong; in my view the tribunal’s reasoning was correct.
36.	It recorded at paragraph 66 that (as was common ground in the case) “a body whose activities are primarily directed at wildlife (rather than human beings) will not on that ground be excluded from ranking as a philanthropic body”. Then, at paragraph 77, summarising its findings, it said that the trust’s “activities are primarily directed at wildlife (which includes game of all species) and they serve to benefit the general community. Thus, taking a strict but unstrained view of the exempting words of Item 1(e) of Group 9 to Schedule 9, we think the Trust has established exempt status for its supplies to its members.” The difference between that case and this is that while many of the trust’s members were in fact participants in sporting shooting, the tribunal concluded that any benefit to them as shooters was incidental to its main aim of conservation. Here, though I do not doubt that conservation and other public-spirited activities are seriously pursued and represent a substantial part of BASC’s activities, the conclusion is inescapable that they do not constitute BASC’s primary aim: the balance here is the reverse of that in Game Conservancy Trust. Its objects as they are set out in BASC’s constitution, its mission statement and the material produced for members all make it clear that BASC is, primarily, a representative body for sporting shooters; its other activities are subordinate to that main aim. It follows that its claim that the residual subscription income is paid for an exempt supply can succeed only if that principal aim, of representing its members’ interests, can properly be said to be of a political, philanthropic or civic nature, and in the public interest.
37.	It does not seem to me possible to argue that the representation of its members’ interests can conceivably be regarded as philanthropic or civic, since, whatever may be said of what I have found to be BASC’s subordinate activities, representation of its members confers no benefit on the community at large, or in a particular locality (or localities), which I take to be what is connoted by “civic”.
38.	The question of what constitutes a political object did not arise in British Field Sports Society; all that was in issue there was whether the society’s campaigning activities amounted to the carrying on of a business. The matter was, however, considered by the tribunal in National Federation of Post Office and British Telecom Pensioners v Customs and Excise Commissioners (2002, Decision 17980). The federation was a lobbying organisation which campaigned for the protection and advancement of its members’ pension interests, though its activities, if successful, would have been for the benefit of pensioners who were not members. The tribunal concluded that “lobbying Members of Parliament and the Government about the rights of pensioners generally” could not “be said to be a political objective”, because the federation was “not directly involved in the political process or the operation and function of government” (see paragraphs 55 and 56 of the decision).
39.	I very much doubt that reasoning. It is at odds with the observation, at paragraph 35 of the decision, that “the Commissioners did not submit that the term ‘political’ must relate only to membership organisations seeking election, ie political parties. The Commissioners accept, for example, that organisations whose primary or overall aim is to change the law through the political process (or prevent such a change) could benefit from the exemption.” It also seems to me to be unwarranted by the wording of the legislation: I see nothing there to suggest that the political exemption is intended to be restricted to government organisations or political parties, as the Commissioners themselves had agreed in that case. I do not, therefore, accept that BASC is excluded, by its nature, from taking advantage of the exemption.
40.	The difficulty which BASC faces seems to me to lie, rather, in its constitutional objects, which I have set out above. Only clause (d) could realistically be regarded as political in character. I attach some, but not much, weight to its appearing fourth in the list; more important in my view are the facts that it is only one of four separate objectives, that it is in mild terms, and that (and not merely because of its placement) it seems to me to be no more than a means by which BASC can better pursue its primary aim of acting “as a representative national body for all sporting shooting”: it does not, in my judgment, amount to an aim in itself. Construing the exempting requirements, as I must, strictly, I find it impossible to conclude that BASC’s primary objects are of a political nature. The claim that the residual subscription income is the consideration for a supply within Item 1 of Group 9 must, therefore, fail. I do not need to decide whether its political aims, such as they are, are in the public interest though I see some tension between that requirement and the acceptance that the pursuit of political aims (which may, depending upon one’s point of view, be quite contrary to the public interest) can amount to an exempt supply.
41.	I accept Mr Barlow’s point, in relation to his second argument, that a supply is not disqualified from falling into Item 3 of Group 10 merely because it is not made while the recipient is actually partaking in the relevant sport. However, I am bound to agree with Mr Chapman that BASC’s supplies to its members—not only the primary supply of representation but also the subsidiary supplies of conservation, research and the like—do not have the close link with participation in sport which the legislation demands (leaving aside the UK’s additional requirement that the supply be “essential”). BASC’s activities are no doubt of benefit to participants in the sport, but that is not, in my view, enough. I differ from Mr Chapman in that it seems to me irrelevant that not all sporting shooters are members of BASC (they could be members of similar organisations) or of no organisation at all (since they could secure equivalent supplies themselves). However, the use in the Directive of the phrase “to persons taking part in sport” seems to me to connote a supply which, even if not essential or contemporaneous, has a direct link with actual participation. None of BASC’s supplies is in that category: it does not provide to its members the land on which they may shoot, the game they may shoot at or the guns with which they may shoot it. All it can be said to do is make it more likely that the right to shoot is preserved and the facilities for doing so survive. Important though those activities may be, I do not find that they have the close link with participation which is required. Thus the supplies do not come within Item 3 to Group 10.
42.	Accordingly, though with some regret, since I have no doubt that much of what BASC does is of general public benefit, I have concluded that this appeal must be dismissed. I leave it to the parties to determine the input tax adjustment which must be made, but give permission to them to apply for a direction that the appeal be continued (not necessarily before me) for that matter to be resolved if they are unable to agree. Mr Chapman did not seek a direction in respect of costs.

COLIN BISHOPP
CHAIRMAN
Release Date: 10 July 2008

MAN/07/0600