VAT returns, religious objections to on-line filing and Article 9 ECHR

The BBC reports that a couple in Cornwall has won the right not to file on-line VAT returns after claiming that to do so was contrary to their religious beliefs. Although the appeal in Blackburn & Anor v Revenue & Customs [2013] UKFTT 525 (TC) was heard at First-tier Tribunal level and will most likely be appealed further, the principle involved is sufficiently important as to warrant careful analysis.

The facts

Graham and Abigail Blackburn are beekeepers trading as Cornish Moorland Honey. They registered voluntarily for VAT because, though their supplies of honey are zero rated, registration enables them to recover the input tax on supplies made to them in the course of business, such as the VAT on the cost of jars. They are also Seventh-day Adventists who shun computers, the internet, television and mobile phones (but not fixed-line phones) on the grounds that electronic communications are a corrupting influence.

Regulation 25A of the Value Added Tax Regulations 1995/2518 requires VAT returns to be filed on-line but 25A(6)(a) provides an exemption for a person who is “a practising member of a religious society or order whose beliefs are incompatible with the use of electronic communications”. The Blackburns’ claim for a religious exemption from e-filing was an appeal against HMRC’s refusal to exempt them on religious grounds under 25A(6)(a). HMRC stated in its letter of 4 May 2012 that:

“No connection to the beliefs of any individual religious society or order has been shown in the way contemplated by the regulation. The wording in the regulation looks to be a very precise requirement for exemption and has to be construed according to the words which have been used. It is not my belief that there was an intention to broaden the basis of exemption to include constructions of scripture which fall outside the tenets of a definable faith. If that had been so then the statute would not have been worded as it is.”

The Seventh-day Adventist Church does not require its members to shun electronic communications and, indeed, has its own website. However, at page 142 of its Manual the Church warns adherents that though radio, television and the internet

“… can be great educational agencies through which we can enlarge our knowledge of world events and enjoy important discussions and the best in music …  modern mass media also can bring to their audiences almost continuous theatrical and other performances with influences that are neither wholesome nor uplifting.  If we are not discriminating, they will bring sordid programs right into our homes…”

Mr Blackburn conceded that his Church used the internet for what it saw as good purposes, such as evangelism and education and did not directly required its adherents to avoid electronic communications. However, the couple’s religion required them to live in accordance with the Bible and he cited a large number of Biblical texts which he interpreted as requiring him to shun computers, television and mobile phones. He believed that each person had to act in accordance with conscience and had no difficulties in dealing with people (such as his suppliers) who used computers because that was their choice. But his own choice was neither to use a computer himself nor to ask someone to use one on his behalf.

HMRC argued that the Blackburns’ choice was a personal preference rather than a fundamental part of their religion because the use of electronic communications was not incompatible with the tenets of their Church; moreover, they did not object to using non-mobile phones so they clearly did not object to all electronic communications as such. Mr Blackburn’s reply was that the most important part of their religion was that at the Second Coming only the righteous would be saved and that in order to be righteous they had to act in accordance with their own consciences – and their consciences told them that the Bible required them to shun computers and television.

The judgment

The appeal was allowed. Tribunal Judge Mosedale found it as a fact (para 32) that the Seventh-day Adventist Church did not consider its beliefs to be incompatible with the use of electronic communications and her conclusion on the application of Regulation 25A(6)(a) to the appellants, “if seen purely as a question of the normal rules of construction and without reference to the effect of the Human Rights Act 1998” (para 33) was that they were not entitled to the religious exemption under Regulation 25A(6)(a). However, section 6 of the Human Rights Act 1998 required public authorities to act in accordance with Convention rights; and though it did not apply either to primary legislation or to secondary legislation which is in the form that it is because of constraints imposed by primary legislation, the Regulations at issue were secondary legislation unconstrained by primary legislation. Section 6 HRA 1998 therefore applied. On that point, Rafferty LJ had observed in Bull & Bull v Hall & Preddy [2012] EWCA Civ 83, obiter, that:

“[28] …  Unless the primary legislation dictates the contents of the Regulations…, any judge can strike down subordinate legislation:  see section 4(3) of the Human Rights Act 1998”.

Judge Mosedale accepted that using a computer or having an agent use it on their behalf was contrary to the Blackburns’ religious beliefs and that by entirely shunning computers they were manifesting those beliefs.

In Eweida & Ors v United Kingdom [2013] ECHR 37 the ECtHR had pointed out (at paras 81 & 82) that though the right to freedom of thought, conscience and religion denoted “… views that attain a certain level of cogency, seriousness, cohesion and importance….” and that “In order to count as a ‘manifestation’ within the meaning of Article 9, the act in question must be intimately linked to the religion or belief”: nevertheless,

“the existence of a sufficiently close and direct nexus between the act and the underlying belief must be determined on the facts of each case. In particular, there is no requirement on the applicant to establish that he or she acted in fulfilment of a duty mandated by the religion in question….”.

Judge Mosedale was satisfied that in the present case there was, in fact, such a close and direct nexus between act and belief and that the Blackburns were acting in fulfilment of a duty mandated by their religion as they perceived it (para 52) Moreover, she rejected HMRC’s contention that they should circumvent the need to use a computer to file on-line by using a terminal in a public library or employing an agent to file on their behalf (para 54). She also dismissed HMRC’s suggestion that the appellants could simply deregister for VAT in order to avoid on-line filing: the right to recover input tax was a fundamental right under European Union law and it was disproportionate that they should be required to give up that right and suffer the financial consequences of doing so as the cost of abiding by their religious beliefs (para 58). The requirement to file on-line was therefore an undue restriction of their rights under Article 9(1) (para 59).


The above is merely a summary and the judgment merits careful reading in full. Possibly its most important feature is that it applies the lower threshold established by the ECtHR in Eweida for determining whether or not there is a “close and direct nexus” between action and belief. It also illustrates that cases of this kind are highly sensitive to the facts. But whether this is now the direction of travel for cases of this kind remains to be seen: perhaps the Tax & Chancery chamber of the Upper Tribunal will tell us.


Postscript: The Tribunal also  heard appeals in LH Bishop Electric Company Ltd, Allan Frederick Sheldon t/a Aztec Distributors and Winston Robert Duff Tay t/a Rhos Filling Station. Of the three appellants, all of whom ran small businesses, two suffer from disabilities that makes it difficult or impossible for them to use computers, while the third  lives in a remote area with unreliable broadband access. Andrew Scott, of Shepherd & Wedderburn LLP, has posted a helpful analysis of the three cases.

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