BRIDGE IS NOT A SPORT BUT A GAME FOR VAT PURPOSES ACCORDING TO UK TAX RULING
BY PROF DR IAN BLACKSHAW
A UK Tax Tribunal has ruled on 24 February, 2014 that contract bridge, which has a following of some 300,000 players in Britain, and indeed many adherents in the rest of Europe and elsewhere in the world, is not a sport but a card game and, therefore, VAT is payable on the entry fees to competitions organised by the English Bridge Union. The income from these fees amounted in the tax year 2012-2013 to some £630,000, a sum worth fighting over by the English Sport’s Governing Body.
This ruling, in the opinion of the author of this note, is rather perverse considering that bridge has been recognised since 1995 as a sport by the International Olympic Committee (IOC). It falls into the category of so-called ‘Mind Sports’. As to what constitutes ‘Mind Sports’, see paragraph 2.5 of the IOC ‘Olympic Programme Commission Executive Board Report’ of August 2002, at page 8, which states as follows:
“While there is no global definition of what constitutes a sport, and what the differencebetween a sport and a game is, the most commonly accepted element of a sport is physical exertion in the conduct of competition. In this regard, ‘mind sports’ could be considered as sports where the physical elements are not necessarily performed by the player in the conduct of the competition.”
However, the Judge in the UK VAT case, Charles Hellier, considered that “…. Sport normally connotes a game with an athletic element, rather than simply a game” and held that “Contract bridge involves some physical activity, but not a significant amount.” He went on to state that “The physical activity is not the aim of participation and physical skill, as opposed to purely mental skill, is not particularly important to the outcome of participation.” In other words, in his judgement, the mental element in bridge was more important than the physical side.
He, therefore, accepted the contention made on behalf of HMRC (the Tax authority) that it was the physical, rather than the mental, aspect of sport that benefitted from the VAT exemption.
On the other hand, he rejected the claim, made on behalf of the English Bridge Union, that, within the proper meaning of sport, contract bridge promotes mental and physical wellbeing. For example, playing bridge, it is claimed, can prevent Alzheimer’s disease. Likewise, the Judge ignored the point made, on behalf of the English Bridge Union, as to whether it was possible to draw a distinction between the mental skill in planning a snooker shot, or a croquet stroke (both games being recognised sports), and the physical skill in executing it. In each case, it was argued that these sports were VAT exempt even though “physical skill or activity plays second fiddle to mental skill.” Furthermore, the Judge also disregarded the fact, brought to his attention by the English Bridge Union, that national bridge bodies in Belgium, France, Holland, Ireland and Poland did not charge VAT on competition entry fees.
However, Judge Hellier did admit some unease in that, in not recognising bridge as a sport, this might discriminate against older people, a high proportion of which regularly played this card game. In this connection, it may be added that discrimination, in any form, is prohibited in paragraph 6 of the ‘Fundamental Principles of Olympism’, which are set out in the preamble to the Olympic Charter (the latest version of which dates from 9 September, 2013).
It seems surprising to the author of this note that the Judge did not accept that bridge was regarded as a sport by the IOC, which, after all, is not only the highest body in world sport, but also whose criteria for defining what is and what is not a sport and which sports may be included in the ‘Olympic Programme’ are widely regarded as being very exacting indeed!
As mentioned above, a perverse decision!
Note: It is planned to include a more in depth report on this Case in the June 2014 Issue of ‘Global Sports Law and Taxation Reports’