# The Value Added Tax (Sport, Sports Competitions and Physical Education) Order 1999, Note: Explanatory note


(This note is not part of the Order)
This Order applies to services supplied on or after 1st January 2000. It amends Group 10 of Schedule 9 to the Value Added Tax Act 1994 (c. 23) (the Act). Group 10 was amended by the Value Added Tax (Sport, Sports Competitions and Physical Education) Order 1998 (S.I. 1998/764) (the original Order) which was made on 17th March 1998. The original Order was not approved as required by section 97(3) of the Act and ceased to have effect after 24th April 1998.
Group 10 exempts from VAT certain supplies relating to competitions and sports and physical education. This group implements Article 13A(1)(m) of EC Directive 77/388/EEC (O.J. L145, 13.6.1977, p. 1) (the Sixth VAT Directive), which requires member States to exempt supplies of sporting services by non-profit making bodies, but to tax such supplies made by commercial bodies.
Article 3 of the Order amends Items 2 and 3 and Notes (1), (2) and (3) of the group by substituting “an eligible body” for the references to “a non-profit making body” so that supplies which would otherwise fall to be exempt by virtue of Items 2 and 3 will only do so if they are made by an eligible body.
Article 4 of the Order inserts Notes (2A), (2B) and (2C). Note (2A) defines an “eligible body”. An eligible body is a non-profit making body which is not subject to commercial influence and which cannot distribute any profit which it makes otherwise than to a non-profit making body unless the distribution is made to a member of the body upon the dissolution or winding up of that body. An eligible body must also (except upon dissolution or winding up) use any profits made from supplies exempted by Items 2 and 3 for the continuance or improvement of any facilities made available in connection with those supplies or apply them to a non-profit making body. This implements the first indent of Article 13A(2)(a) of the Sixth VAT Directive.
Article 5 inserts Notes (4) to (17) which attach conditions and provide definitions for the exclusion from exemption of supplies which are made by bodies which are subject to commercial influence. These Notes implement the second indent of Article 13A(2)(a) of the Sixth VAT Directive, which permits member States to limit exemption to supplies by bodies managed and administered on an essentially voluntary basis by persons who have no direct or indirect interest, either themselves or through intermediaries, in the results of the activities concerned. They also implement the obligation in the preamble to Article 13A(1) of the Sixth VAT Directive for member States to make the grant of exemption subject to conditions for the purpose of preventing evasion, avoidance or abuse.
Note (4) to the group defines the circumstances in which a body will be considered to be subject to commercial influence and which will lead to the loss of exemption from VAT. This is where there is a time in the relevant period when a person who is associated with the body has made certain defined supplies to it or received an emolument from the body or has arranged to make such supplies or to receive an emolument from the body after the end of the relevant period.
Note (5) defines the relevant period in connection with supplies made by the body before 1st January 2003 and in connection with supplies made on or after that date.
Note (6) defines the supplies which are relevant supplies for the purposes of the group.
Note (7) excludes from treatment as a relevant supply, a supply made by a body, whose principal purpose is to provide sports or physical recreation facilities for use by its employees. It also excludes from such treatment certain other supplies which are defined in that Note.
Note (8) describes the times when an officer or shadow officer of the body, or an intermediary, shall be taken to have been associated with a body.
Note (9) provides that a person shall also be taken to have been associated with a body at a time mentioned in Note (8) if he was connected with a person who, by virtue of that Note, is taken to have been so associated at that time.
Note (10) provides that subject to Note (11), a person shall not be taken to have been associated with a body at the times referred to in Note (8) if the only times when that person, or the person connected with him, was an officer or shadow officer of the body occurred before 1st January 2000.
Note (11) provides that Note (10) will not apply where (but for that Note) a body would be treated as subject to commercial influence by virtue of, or anything done in pursuance of, an agreement entered into on or after 14th January 1999 and before 1st January 2000.
Notes (12) and (13) define the times when a person will be taken to have been an intermediary for supplies made to the body making a sports supply and when those Notes are to be applied to determine whether the person making a supply was an intermediary. Where appropriate, these Notes will determine the number of intermediaries between the body concerned and persons who are officers or shadow officers of that body or persons connected with them.
Note (14) provides that it is immaterial whether a supply made by an intermediary occurred before the supply or agreement by which that person falls to be regarded as an intermediary.
Note (15) provides that in the preceding Notes references to a supply include supplies which, for other purposes, fall to be disregarded by virtue of section 43(1)(a) of the Act.
Note (16) defines certain terms used in the Notes.
Note (17) provides that the question whether a person is connected with another will be determined in accordance with section 839 of the Taxes Act.

---
Source: https://www.legislation.gov.uk/uksi/1999/1994/note (the official version)
Page: https://openlegislation.uk/value-added-tax-sport-sports-competitions-and-physical-education-order-1999/note
Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives.