| REVENUE — Value added tax — Exemptions — Betting and lotteries —
Call centre taking telephone bets on behalf of betting organiser — Whether activity exempt — Sixth VAT Council Directive 77/388/EEC, art 13(B)(f)
United Utilities plc v Customs and Excise Commissioners (Case C-89/05)
ECJ: President of Chamber Timmermans, Judges Schintgen, Silva de Lapuerta, Arestis and Klučka: 13 July 2006
The activities of an agent acting as a call centre, accepting telephone bets on behalf of its principal, the organiser, were not exempt from VAT as betting transactions.
The Second Chamber of the Court of Justice of the European Communities so held on a reference by the House of Lords.
By an agency agreement with its principal, L Ltd, an organiser of telephone bookmaking, V Ltd, a company in the same VAT group as the claimant, provided staff, premises and telephone and computer equipment for accepting bets from the public over the telephone and making records of them, strictly on the basis of criteria laid down by L Ltd. It was accepted that V Ltd performed a necessary step in the creation of a legal bet relationship between L Ltd and its customers. L Ltd selected the events on which bets could be placed, fixed the odds, and managed all revenue matters. The commissioners having rejected a claim that V Ltd’s activities came within the exemption in article 13(B)(f) of the Sixth Directive for “betting, lotteries and other forms of gambling”, proceedings were launched in the course of which the House of Lords sought a preliminary ruling on whether article 13(B)(f) was applicable in the circumstances.
THE COURT said that, in contrast to the transactions referred to in article 13(B)(f), V Ltd’s services clearly could not be characterised by the offer to customers placing bets of a chance of winning, in consideration for accepting the risk of having to pay for winnings, and therefore did not come within that provision. It was immaterial that the acceptance of bets by V Ltd’s staff was a stage, however important, in the placing of the bets.
On those grounds the court ruled that article 13(B)(f) of the Sixth Directive meant that the provision of call centre services to a telephone bookmaking organiser, which entailed the staff of the supplier of those services accepting bets on behalf of the organiser, did not constitute a betting transaction within the meaning of that provision and could therefore not qualify for the exemption from VAT laid down by it.
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