This was an appeal against the issue of a penalty for incorrectly issuing a zero-rating certificate.

The appellant was a rowing club. It undertook the construction of a ‘Water Sports Hub’ building to be used by itself and other sports clubs in the local area, and also to provide a gym facility for which it would offer membership to non-club members. The appellant issued a zero-rating certificate on the basis that the building was intended to be used for a relevant charitable purpose otherwise than in the course or furtherance of a business.

HMRC issued a penalty for wrongly issuing the zero-rating certificate and the appellant appealed on the grounds that it had a reasonable excuse.

Background

The appellant’s grounds of appeal stated that it had a reasonable excuse for issuing the zero-rating certificate for the following reasons:

(1) the appellant has a number of financial and tax professionals