Tribunal Clarifies 'Philanthropic' Criteria for VAT Exemption in UGLE Case

Citation: [2023] UKUT 307 (TCC)
Judgment on


In the case of the United Grand Lodge of England v The Commissioners for HM Revenue and Customs [2023] UKUT 307 (TCC), the Upper Tribunal (Tax and Chancery Chamber) examined the exemption from Value Added Tax (VAT) regarding supplies made by the Appellant to its members for subscription fees. The key points of contention revolved around whether the Appellant’s activities, specifically the provision of Relief to its members, could be classified as having a ‘philanthropic’ aim within the meaning of Article 132(1)(l) of Council Directive 2006/112/EC and whether adequate reasoning was provided by the First-tier Tribunal.

Key Facts

The Appellant, United Grand Lodge of England (UGLE), is the governing body for the majority of Freemasons in England and Wales. UGLE contends that its supplies to members, in exchange for subscription fees, should be VAT-exempt on the basis that its main aims are of a philosophical, philanthropic, or civic nature. The First-tier Tribunal (FTT) previously dismissed UGLE’s appeal against HMRC’s decision, finding that UGLE had a main aim, the provision of Relief to Freemasons and their dependents, which was not considered ‘philanthropic’ in nature. UGLE challenged this decision on the grounds that the FTT failed to reasonably consider its main philosophical aim and to classify its support of Masonic charities as inherently ‘philanthropic’.

The legal principles in this case centered on the interpretation of ‘philanthropic’ under Article 132(1)(l) of the PVD, and whether an organization’s aims can qualify for VAT exemption under this provision. UGLE’s appeal raised critical questions regarding whether the collective aims of an organization, should they include non-qualifying aims, negate the possibility of VAT exemption, and whether the act of providing Relief can be considered ‘philanthropic’ if it primarily benefits the members of the organization providing the Relief.

The case law referred to by the Upper Tribunal included the Institute of the Motor Industry v CCE (Case C-149/97) [1998] STC 1219 (“Motor Industry”), which emphasized examining what an organization does in practice to determine if its aims are qualifying. The Tribunal also considered the decisions in United Grand Lodge of England v Revenue and Customs Comrs [2015] UKUT 589 (“UGLE 1 UT”), Rotary International v CCE [1991] VATTR 177 (“Rotary International”), and other related case law to guide its interpretation of ‘philanthropic’ and the application of the VAT exemption.


The Upper Tribunal found an error in the FTT’s decision regarding Ground 1, as the FTT failed to provide adequate reasons as to why it did not accept UGLE’s argument of having one main philosophical aim with all activities being in service of that aim. However, on Ground 2, the Upper Tribunal upheld the FTT’s conclusion that the provision of Relief to Freemasons and their dependents, even if charitable under the Charities Act, is not ‘philanthropic’ within the context of Article 132(1)(l) of the PVD as it lacked the wider altruistic benevolence towards mankind in general, necessary to fulfill the ordinary meaning of philanthropy.


The case reaffirms the stringent criteria for VAT exemptions under the PVD and the importance of a clear and comprehensive expression of reasons by tribunals. Additionally, the decision provides an example of the judiciary’s reluctance to conflate the aims of VAT law and charity law without explicit legislative correlation. The Tribunal’s findings are a cautionary note to organizations seeking VAT exemption under the ‘philanthropic’ category; it emphasizes that the internal redistribution of funds among members does not meet the threshold for ‘philanthropy’ in the context of VAT exemption.

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