The United Kingdom Value Added Tax (VAT) Tribunal ruled that Kickboxing is not exempted from VAT liability.
The appellant Premier Family Martial Arts LLP, a kickboxing company lost its VAT dispute argued that kickboxing should be made VAT exempt as it is a part of school education.
The case started on 7 April 2017 when Her Majesty’s Revenue and Customs (HMRC) started an inquiry on Premier Martial Arts LLP. HMRC claimed that the supplies for the kickboxing classes were not exempt; they were to be taxed at a standard rate of 20% which made the company liable for a VAT bill of £411,497 for output tax.
The company argued that as per the Value Added Tax (VAT) Act 1994, the supplies of private tuition, ordinarily taught in a school or university by an individual teacher acting independently of an employer are VAT exempt.
The First-Tier Tribunal judge Tony Beare observed that ‘Kickboxing is not an activity which is commonly taught at schools or universities in the European Union’.
Earlier, the parties had entered into the Alternative Dispute Resolution (ADR) process as the revision of HMRC’s decision did not come in favour of the appellant. With the result of ADR, the company had got the original VAT output tax assessment cancelled and the registration date for VAT purposes amended and extended.
On conclusion, the judge added ‘kickboxing has no single governing body and correspondingly, that there is no extremely set syllabus and no extremely moderated grading system. The subjective nature of the grading system in certain martial arts was a factor in the Department of Education’s decision to exclude those martial arts from the UK’s national curriculum’.
