Closely related goods & services

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HMRC have explained their change of policy following the Brockenhurst College ECJ decision. This is the extent to which the exemption for education includes ‘closely related’ goods and services and, in particular, supplies made to third parties. Their internal guidance at VATEDU53400 explains this.

I have already been looking at whether the same principles should apply to other exemptions. The wording of art 132(1) of the PVD indicates that several other VAT exemptions include closely related goods and services. Usually this Is reflected in UK legislation, but HMRC guidance is at best patchy. As far as I can determine, HMRC have only updated their education material in light of Brockenhurst College. I have already reviewed some welfare providers in relation to this development; I have yet to se any formal response from HMRC.

The consequences for an individual taxpayer will vary; some may no longer be entitled to register; some may have to re-calculate their Partial Exemption.

This is my list of exempt Groups which may be affected by the closely related goods and services provisions:

Group 7 – Health & Welfare

Group 9 –  Subscriptions to Trade Unions, professional & other public interest bodies (See ESC 3.35 in relation to such subscriptions.)

Group 10 – Sports, sports competitions & physical education

Group 12 – Fund Raising Events

Group 13 – Cultural Services

About Les Howard


Hi, I am a VAT Consultant, working mainly with charities. I am based in Cambridgeshire

I have over 20 years experience in VAT, and am currently also a part-time member of the Tax Tribunals.


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09th Aug 2017 10:36

Thanks for the useful update Les.

It seems HMRC believe their VATEDU53400 page was written and updated before the judgement was issued!

They also use an interesting numbering for the three conditions - it seems HMRC cannot count beyond 1!

Thanks (3)

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