Is Bridge a sport for VAT purposes?

Bridge playing cards
By Susan Cattell, Head of Taxation (England and Wales)

10 September 2015

Millions of people around the world play Bridge in clubs, tournaments and with friends.  But is it a sport? And why does this matter? Susan Cattell, Head of Taxation (England and Wales), finds out.

The English Bridge Union thinks Bridge is a sport, but HMRC and Sport England disagree. 

Earlier this year the English Bridge Union (EBU) began legal action after Sport England refused to recognise Bridge as a sport, which meant it could not access lottery funding. 

Sport England uses the 1992 European Sports Charter definition: "Sport means all forms of physical activity which, through casual or organised participation, aim at expressing or improving physical fitness and mental well-being, forming social relationships or obtaining results in competition at all levels."  Sport England believes that Bridge is no more a sporting activity than "sitting at home reading a book".

The High Court however gave permission for a full judicial review hearing which will take place later in September. In allowing the hearing to go ahead, Mr Justice Mostyn found that there was at least an arguable case and noted that the International Olympic Committee had acknowledged that Bridge and chess should be considered as sports which it characterised as 'mind sports'.   

The VAT implications

The EBU had also previously appealed against an HMRC decision to refuse repayment of VAT in relation to Bridge competition entry fees. HMRC based its refusal on its view that Bridge was not a sport for the purposes of the VAT Directive and that the entry fees were therefore a VATable supply. The VAT Directive states that member states should exempt transactions including: "supply of certain services closely linked to sport or physical education by non-profit making organisations to persons taking part in sport or physical education".

In 2014 the First Tier Tribunal concluded that recognition as a sport by the International Olympic Committee and the Charity Commission did not help in deciding whether it was a sport for the purpose of the VAT Directive.  The Charities Act definition refers to "sports or games which promote health by involving physical or mental skill or exertion". 

The Tribunal concentrated on the 'normal English meaning of sport' and decided that Bridge was not a sport for VAT purposes because it did not involve significant physical activity, physical activity was not the aim of participation and physical skill as opposed to mental skill was not that important to the outcome.

The EBU appealed to the Upper Tribunal which has recently decided to refer the question to the European Court of Justice for a preliminary ruling on whether Bridge is a sport within the VAT Directive.   HMRC had originally opposed a referral but changed its position to one of neutrality because it had obtained confirmation that in certain EU member states Bridge is treated as a sport for the purposes of the VAT exemption. 

The Upper Tribunal determined that the Court should be asked to give guidance on the essential characteristics of a 'sport' within the meaning of the Directive, with particular reference to whether it has to involve a significant (or not insignificant) physical element, or whether a game, such as Bridge, with a predominantly mental element of performance and outcome, falls within that meaning.

The EBU hopes that if it succeeds in the imminent judicial review against Sport England it will strengthen its hand in the separate fight to claim the VAT exemption. 

Meanwhile the estimated 300,000 people in the UK who regularly play Bridge still cannot be sure whether they are taking part in sport or not.


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