§ Mr. Hannam
asked the Chancellor of the Exchequer what is the status of the sixth EEC directive (77/388/EEC) in Britain; and what implications sub-paragraphs (b), (g), (h), (i), (l), (m) and (n) of article 13 A1 have for charitable organisations in the United Kingdom.
§ Mr. Hayhoe
The sixth directive was a VAT harmonisation measure made pursuant to articles 99 and 100 of the treaty of Rome and adopted by the Council on 19 May 1977. Under article 189 of the treaty, a directive is binding as to the result to be achieved upon each member state to which it is addressed, but the choice of form and method is left to the national authorities. It is accepted in law that certain provisions of a directive which have not been implemented by a member state can be directly invoked by an appellant if they are applicable to his case.
Article 13 A 1 (b), (g), (h), (i), (l), (m) and (n) of the sixth directive provides exemption for particular supplies of goods and services subject to conditions laid down in the article. Sub-paragraphs (m) and (n) are subject to the transitional provisions in article 28 3(a) and annex E, and the supplies in question may continue to be taxed. The remaining sub-paragraphs provide exemption for a range of goods and services supplied in the public interest by bodies which may include charities; the great majority of these supplies are already exempt or otherwise relieved in the United Kingdom. However, in a recent appeal heard 504W by the High Court—the Yoga for Health Foundation v. the Commissioners of Customs and Excise — it was ruled that certain residential courses in therapeutic yoga were covered by the exemption provided for in article 13 A 1 (g). These courses have now been relieved, and I am now considering what changes in the legislation governing exemption from VAT may be necessary as a consequence of the decision.