Mid Ulster VAT case win may see 拢50m in rebates for councils

Image source, PA Media

Image caption, It is understood the rebate for Mid Ulster alone could be about 拢3m
  • Author, John Campbell
  • Role, 成人快手 News NI Economics & Business Editor

Mid Ulster District Council has won a VAT case that could see local authorities in NI receive rebates of more than 拢50m.

The case centred on whether VAT should be levied on the charges paid by members of the public for using council sport and leisure facilities.

A tax tribunal ruled that VAT should not have been applied on those charges since 2006.

The relevant VAT will now have to be repaid to all 11 councils in NI.

Councillor Cathal Mallaghan, chair of Mid Ulster, called the ruling a "mammoth victory".

"Given the significant financial pressures which we all face as a result of the pandemic, the timing could not be any better," he added.

'Dogged determination'

The tribunal agreed with the council that supplies of leisure and recreational services to members of the public were provided by the council in its role as a public authority acting under a special legal regime, within the meaning of the EU Principal VAT Directive.

The council was then able to demonstrate there was no significant distortion with the private sector, as they could not provide the same level and scope of services without financial viability being primary.

That meant no VAT should ever have been charged on the services.

Mr Mallaghan praised the council's finance director, JJ Tohill, for his "expertise, hard work and dogged determination" in pursuing the case.

The council first began to challenge the VAT payments in 2009.

It is understood the rebate for Mid Ulster alone could be about 拢3m.

An HMRC spokesperson said it was "considering the judgement carefully".