While the subject matter may have raised a smile in some quarters the decision actually raises some very serious points about how tax legislation is drafted and interpreted.
The case concerned the scope of the VAT exemption for the supply of private tuition.
The legislation restricts this exemption to subjects “ordinarily taught in a school or university”.
Unfortunately for the Appellant, while HMRC accepted that “dance” is a qualifying subject, they took the view that “belly dancing” was not. The Tribunal agreed with HMRC and the Appellant has been left with a hefty VAT bill as a result.
The Tribunal’s view was that the classes taught by the Appellant were ‘recreational’ rather than ‘educational’ – but this leaves a big question over exactly where the line is to be drawn between the two. Am I the only one to detect an element of intellectual snobbery here?
I also wonder if the result would have been different if Turkey were a member of the EU!