VAT and unincorporated associations: member payments for services were taxable supplies despite drafting changes to the constitution.

An unincorporated association providing services to members through employees and funded by member contributions was treated as making taxable supplies for VAT purposes. The statutory deeming provision brought the association within the VAT regime where it, under its rules, supplied facilities or advantages to members for subscription or other consideration; those payments were consideration for a taxable supply and the association was carrying on a business. A constitutional rewording describing members as principals and the committee as agents did not alter the commercial substance, because the services remained governed by the association's rules and funded by payments into its own funds with a direct link to the services provided. The appeal therefore failed and the association remained registerable and liable for VAT.

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Issues: Whether an unincorporated association providing services to its members through employees and funded by member contributions made taxable supplies for VAT purposes, so as to remain registerable and liable to VAT.

Analysis: The decisive questions were whether the association was an association or organisation within the statutory scheme, whether the services were provided in accordance with its rules, and whether the members' payments were consideration for those services. The statutory deeming provision treating the provision by an association of facilities or advantages to members for subscription or other consideration as the carrying on of a business brought the association within the VAT regime. The change in constitutional wording, including the description of members as principals and the committee as agents, did not alter the commercial substance of the arrangement. The services supplied by the association remained governed by the rules of the association and were funded by payments into its own funds, with a direct link between the services provided and the consideration received.

Conclusion: The association was making taxable supplies to its members and was a taxable person required to remain registered for VAT.

Final Conclusion: The appeal failed because the arrangement remained, in substance and in law, a taxable supply by an association to its members rather than a mere joint purchase of services or internal reimbursement of expenses.

Ratio Decidendi: Where an unincorporated association, acting under its rules, provides facilities or services to members for payments into its funds, those payments constitute consideration for a taxable supply and the association is treated as carrying on a business for VAT purposes, regardless of drafting changes intended to recharacterise the arrangement.

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