Where the wild things are
Value Added Tax
Until I was ten I wanted to be a vet. My best friend Ingrid’s dad was one. Ingrid and I used to peer through the window and watch him doing operations. I remember finding a frog with a swollen leg on my way back from my music lesson and taking it to Ingrid’s dad for a diagnosis. Turned out to be something to do with mating but I can’t remember the details.
My brother and I even kept terrapins in the bath until my mother put her foot down and they were moved to the shed. My dad, a keen coarse fisherman, stored maggots in our fridge in margarine tubs which led to some nasty near misses with the toasted tea cakes.
“Where on earth is this going?” I hear you ask.
Well, animals seem to have been popular with HMRC too but not in a James Herriott way.
Take the Wildfowl and Wetland Trust case.
The issue was whether seven centres owned by the Wildfowl and Wetland Trust were zoos for VAT purposes. The question was important because certain cultural services are exempt from VAT under EU law. UK law giving effect to this exempts the supply of a right of admission to a zoo by certain bodies from VAT.
The Wildfowl and Wetland Trust argued that each of seven sites (which contained some captive animals) were zoos both generally, and in the context of Item 2 of Group 13 of Schedule 9 VATA 1994, as ‘a place where wild animals are kept for breeding, study or exhibition to the public’ which was the definition of ‘zoo’ in the Shorter Oxford English Dictionary. HMRC’s somewhat ludicrous sounding contention was that the sites were not zoos as not all the animals were ‘contained’ within them. Some were free to come and go. The contained animals were ancillary to the principal purpose of each site, namely as a wildfowl centre. In other words, the ‘wild’ was in ‘wildfowl’ for a reason.
The members of the First-tier Tribunal made a visit to the Trust’s Barnes Wetland Centre in South West London. They said they didn’t go to Slimbridge ‘for reasons of cost and convenience’. Come on guys, Slimbridge is in Gloucestershire not the Masai Mara. Cost and inconvenience wouldn’t have deterred my hero Lord Denning. Is there no spirit of adventure amongst the judiciary these days?
The First-tier Tribunal decided that each of the seven centres was a zoo as each had substantial captive animal collections and the majority of visitors spent the majority of their time exploring the captive exhibits which allowed them to appreciate birds they would not normally get to see up close.
In an earlier case relating to Twycross Zoo HMRC took the contrary view and argued that charges for ‘close encounters’ with giraffes and elephants (for which there was a separate payment from the standard admission fee) were exempt as the exemption for zoo admission applied to all rights to view and interact with the animals on zoo premises. The tribunal disagreed. No site visit in this case obviously.
By the way, there’s even a VAT case about a vending machine that sold maggots (Fluff Ltd v CCE [2001] STC 674). Dad would have loved the idea of a maggot-vending machine. And so would mum if it had stopped him using the fridge.
Tax lawyer specialising in business tax, SDLT and VAT
