Freemasons lose VAT exemption High Court battle

A tribunal had ruled that the aims of the United Grand Lodge of England, which administers lodges of freemasons, were not of a «philosophical, philanthropic or civic» – or «religious» nature for the purposes of VAT exemption.

Now a High Court judge has dismissed an appeal by the United Grand Lodge.

Mrs Justice Asplin’s decision was published following a hearing in London.

HM Revenue and Customs commissioners had initially decided that the aim of freemasons were not philosophical, philanthropic or civic for VAT purposes, said the judge.

The United Grand Lodge had challenged that decision.

A tax tribunal had dismissed the challenge last year.

The United Grand Lodge had then taken the case to an appeal tribunal – presided over by Mrs Justice Asplin.

HM Revenue and Customs’ commissioners had initially decided that the aims of freemasons were not philosophical, philanthropic or civic for VAT purposes, said the judge.

The United Grand Lodge had challenged that decision.

A tax tribunal had dismissed the challenge last year.

The United Grand Lodge had then taken the case to an appeal tribunal, presided over by Mrs Justice Asplin.

The initial tribunal had been overseen by tax judge Charles Hellier.

Legislation allowed VAT exemptions «for certain supplies in the public interest, he had said in a ruling, a nd he said the United Grand Lodge was a non-profit making institution.

He said the tribunal had heard evidence from Quentin Humberstone, the United Grand Lodge’s treasurer.

Mr Humberstone had said «virtuous behaviour: loyalty, the keeping of confidence, truthfulness, wisdom, strength in adversity, beauty, perseverance and more» were advocated by freemasons.

«All of these Mr Humberstone said were encapsulated in the three Grand Principles of Freemasonry: Brotherly love, Relief and Truth,» said Judge Hellier.

«Each was specifically taught in the formal lectures. The allegorical stories were better ways of ensuring the absorption of the principles than simply stating them.

«He said that after some time one began to understand the rather tortuous language of the lectures and rituals, and the allegory and symbolism affected the way people behaved more deeply: the principles became embedded and core to a mason’s approach to life.»

The judge said there was no doubt that freemasons made «very substantial» contributions to charitable causes.

«Numerous letters from beneficiaries attested to the generosity on the scale of masonic giving: the Royal College of Surgeons had received £4 million since 1967, Help the Hospices £9 million since 1984, the Red Cross £1.7 million since 1998, and Air Ambulance £250,000 since 2008,» said Judge Hellier.

«The combined charitable spending of the masonic charities in 2010 was £82 million, which we were told was second only to the National Lottery in the amount of charitable contributions.

«Of this £82m, £20 million was paid for the benefit of masons, £46 million for the benefit of their dependants, and £17 million for the benefit of others with no masonic connection.»

Judge Hellier said the tribunal had accepted that some of the United Grand Lodge’s aims were of a «philosophical, philanthropic and, to some smaller extent, civic nature».

But he said the United Grand Lodge had «other aims as well».

He said the tribunal concluded that some aims fell within the VAT exemption and some did not, a nd he said the aims which «did not fall within the exemption» were of «sufficient magnitude» to cause the United Grand Lodge to «fall outside the words of the exemption».

On that basis the tribunal had dismissed the United Grand Lodge’s challenge.

Mrs Justice Asplin concluded that the initial tribunal had not «erred in law».

She said the tribunal had reached a conclusion «to which it was entitled to come» having considered the evidence an d she said the United Grand Lodge’s appeal had to be dismissed.