Under Regulation 25 of the Value Added Tax Regulations 1995/2518, VAT returns must normally be filed online. However, under regulation 25A (6)(a), where the Commissioners are satisfied that a person registered for VAT is a practising member of a religious society or order whose beliefs are incompatible with the use of electronic communications, that person is not required to make the returns required by Regulation 25 using an electronic return system.
In Harvey (T/A Sun Ice Air Conditioning) v Revenue & Customs (VAT – APPEALS: Other)  UKFTT 266 (TC), Mr Harvey had told HMRC in 2012 that, on religious grounds, he did not wish to file his VAT returns electronically. HMRC replied with a request for further details of his religious beliefs and his answer was that “there is only one person who can determin (sic) my religious beliefs and that is me and no other. You are (or other) not qualified to make such a decision on my behalf” . In response to a second request, he replied:
“we have provided the information required to your mandation review team, who as indicated are not qualified to judge my religious beliefs … Unfortunately I cannot concur with your statutory regulations as these have been voted for by members of parliament, who have sworn an allegiance to the HM Queen, who is head of the Christian Church of England, which is not my choice of faith” .
In evidence to the Tribunal:
“Mr Harvey re-stated his position that his religious beliefs were incompatible with filing VAT returns online. Mr Harvey acknowledged that he did not belong to any religious society. Mr Harvey said he did own and use a computer but found its use difficult, as it caused him eye problems once he had been using a computer for longer than around 10 minutes. He was also concerned about security when using the Internet. In response to direct questioning, he stated he did not use Internet banking, nor tax his car online. However, he did not expound on his religious reasons, or (despite being asked) describe any other areas of his life in general (other than online filing) where his position with regard to electronic communications caused problems and explain how these were overcome” .
In a short judgment, Tribunal Judge Allatt looked at the issue both from the point of view of religious exemption and from the standpoint of Article 9 ECHR. There were two conditions in 25A (6)(b) for the exemption on religious grounds:
- That “the Commissioners are satisfied”: Mr Harvey had provided very little evidence one way or the other about his religious beliefs: “It was explained to the Appellant that the burden of proof was on him to do this. One of HMRC’s points was that it was impossible for them to be satisfied on the evidence given to them up to this point” .
- That to claim the exemption, one must be “a practising member of a religious society or order whose beliefs are incompatible with the use of electronic communications“: HMRC contended that it was the beliefs of the society and not those of the individual that were relevant, otherwise those words were redundant. The wording provided an objective test (that of the beliefs of the society) rather than a test based on the personal beliefs of individuals .
TJ Allatt agreed with HMRC on the first point; however, she went on to consider the remaining points.
There was an ambiguity in the legislation: it was not clear whether the “beliefs that are incompatible” were those of the individual or those of the society or order . Mr Harvey had acknowledged that he was not a member of a religious society or order whose beliefs were incompatible with the use of electronic communications . However, even absent the “religious society” requirement, his beliefs did not appear to be incompatible with the use of electronic communications because he used the telephone. He had not, therefore, discharged the burden of proof [26-28].
As to Article 9 ECHR, it clearly went further than protecting only the religious beliefs of a “religious society or order” ; however, she agreed with TJ Mosedale in Exmoor Coast Boat Cruises Ltd v Revenue & Customs  UKFTT 1103 (TC) that, though Tribunals were very reluctant to assess the quality of individual moral or religious beliefs, the law could not protect every belief, since to do so would give people carte blanche to pick and choose . Mr Harvey’s human rights had not been breached by the requirement to use an electronic method (including a telephone) to file online. Reg 25A could be given its ordinary meaning and, on that reading, he was not entitled to an exemption from filing electronically . Nor did he qualify for the exemption on grounds of “age, disability … or any other reason”, since HMRC had offered him the option to use telephone filing . Appeal dismissed.
This is the third recent case on religious or moral objections to online filing. In Exmoor Coast Boat Cruises TJ Mosedale dismissed the appeal because, though the appellant’s beliefs included a strong disinclination to use the Internet, he nevertheless used it to advertise his business and he filed returns online via agents acting on his or his companies’ behalf. In Blackburn & Anor v Revenue & Customs  UKFTT 525 (TC), on the other hand, two beekeepers had won the right not to file their VAT returns online after claiming that to do so was contrary to their religious beliefs as Seventh-day Adventists even though the Seventh-day Adventist Church does not require its members to shun electronic communications and, indeed, runs its own website.
Which leads one to conclude that the interpretation of Regulation 25A (6)(a) is highly sensitive to the facts of the individual case.