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English Bridge Union defeated in VAT Ruling

25th February 2014

As I listened to Radio 4's Today programme during the drive to work this morning, there was a news article which, strangely, brought together two subjects about which I spend quite a lot of time thinking, namely VAT and Contract Bridge.  The former is my favourite tax, the latter, my favourite pastime.  I just couldn't resist a blog post!

VAT is my "favourite" tax in the sense that, unlike income tax (and its relatives corporation tax and capital gains tax) which grew like topsy over the centuries which have passed since Henry the something-or-other needed some ships to fight with, VAT is a "designer tax".  It is based on European law, and therefore much more codified than the sort of law we're used to in England and Wales.  Everything is laid out in detail, and it is very logical, so it is often possible to work out how VAT will treat a particular transaction "from first principles".  Entertainingly, however, being totally logical and codified, it also gives rise to some of the barmiest debates ever found in tax - or indeed anywhere!

Probably the most well-known example is the Jaffa Cakes case, when it took more wigs to decide whether they are cakes or biscuits than you will ever see on a BBC Sunday evening costume drama.  And if you buy Sodium Chloride from a chemical supplier, then, as with other chemicals, the supply is standard-rated and you will pay 20% VAT.  If you nip down to the local supermarket and buy a packet of salt - exactly the same thing - it is of course now "food" and therefore zero-rated.  A less well-known case, but one of my absolute favourites, was the one involving Pringles, in which learned counsel was heard to declaim in court something along the lines of "...and I would ask your Lordships to consider the fundamental underlying potato-iness of the snack...".  Marvellous stuff!

Having spent last weekend competing (admittedly with only mixed success) in the English Bridge Union's Premier Life Masters' Pairs, I was disappointed to hear that the 20% reduction in entry fees I was hoping for in next year's event will not be forthcoming.  And the reason?  The Tax Tribunal has decided that Bridge is a game, not a sport, and so fees to compete will continue to attract VAT.  "I could have told you that; of course it's a game!", I hear you exclaim.  However, the International Olympic Committee think that, along with Chess and Go, Bridge is a "Sport of the Mind", and who are we to argue with them?  That's why I used the word "pastime" in my introduction, as I wouldn't want to appear to be disagreeing with either of these two fine institutions.

I, however, am not complaining.  I fully intend to continue to be entertained by both VAT and Bridge for many decades to come!