VAT News

EU Impact lingers in VAT case for a Dog Groomer


The recent explosion in dog ownership across the UK has no doubt created quite a demand for doggy day care, quirky clothing for our canine pals and regular visits to poodle parlours for a tail trim but sadly for one Dog Groomer the experience has not ended well in the VAT Tribunals.

The short cut to the case ( the full report is here) is that the Dog Groomer – Julie Lalou trading as Dog’s Delight, had deregistered from VAT in 2017 on the basis that her activities specific to the provision of the courses she ran to teach dog grooming qualified as VAT Exempt supplies being private tuition ( VATA 1994 Schedule 9, Group 6 Item 2).

The business had been VAT registered since 2006 and following HMRC’s agreement to the deregistration the tax payer then submitted an Error Correction Notice to seek repayment of all the VAT she had over declared in the period when the fees had been treated as standard rated. HMRC revenue nose started to twitch it seems and the tail, sorry, tale took a further twist.

HMRC wrote to state that they considered that the supplies could not be VAT Exempt as they failed the test of being a course which was “ ‘ordinarily’ taught in schools and Universities”. The taxpayer did provide evidence that colleges in England did indeed supply similar training courses but – and here is the knotty point for the dog groomer – the Tribunal did not feel that this evidence factual as it was – was sufficient to meet the test applied in this instance.

To quote the Tribunal report on this point:

“We can certainly see the force in the argument that dog grooming is commonly taught in further education colleges in England. However, that is not the test. The test is whether dog grooming is ordinarily taught in a school or university which, in agreement with the Tribunal in Premier Family Martial Arts, we take to mean that the relevant activity must be taught at a wide number of schools or universities in the EU. We were provided with no evidence that dog grooming is taught in the United Kingdom anywhere other than certain Further Education Colleges in England, and we were provided with no evidence at all about the position in other member states. In those circumstances, we are not satisfied that the Appellant has met the burden of proving that dog grooming is taught in a wide number of schools or universities in the EU.”

As our readers will know we constantly comment on the complexities of VAT and perhaps you feel this view is misplaced, but it’s now an added complexity for UK taxpayers and to see that the influence of the EU lingers on at least in the interpretation of VAT legislation at the moment. It’ll be interesting to see if this case goes to appeal.

We’ve often commented to clients that we appreciate that VAT may be seen as the “tail” of the business dog when considering VAT implications in the wider commercial context for major projects – this case lends strength to the knowledge that the “tail” can turn to bite you, excuse the pun…


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