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A woman picking up takeaway coffee from barista

Students’ hot food and coffee not VAT free


The University of Southampton Students’ Union (USSU) contended that its sales of hot food and coffee were closely related to education and should be exempted from VAT.

12th Feb 2021
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This was another attempt to extend the VAT exemption for education to associated supplies, where those supplies are closely related to a supply of education or training. HMRC refused a claim for a repayment of £158,000 overpaid output tax, and the FTT agreed with that decision.

The dispute

When education for consideration is supplied by an eligible body it is exempt from VAT (VATA 1994 Group 6, Sch 9, 1 (a) and (c)). Closely related services are included at item 4 and “eligible body” at note 1 (e).

The USSU’s case was that its supplies of catering, including hot food and coffee, were on all fours with a previous High Court case involving Pilgrims Language Courses Ltd. Students using the USSU shop were not students of USSU but rather Southampton University, and indeed might not be students at all, but USSU argued this was not an issue.

The fact was that USSU provided education or vocational training to various individuals including for the following purposes:

  • academic representation
  • clubs and societies committee
  • preparation for elected positions
  • LinkedIn
  • health and safety welfare training
  • food safety and hygiene; and
  • bus driver training.

Of these only bus driver training was actually paid for.

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Replies (1)

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By Paul Crowley
12th Feb 2021 14:50

How was this pointless excercise funded by a students union.
And has the food and drink now gone up in price.

Perhaps the jolly wheeze thought up by such an organisation should be the basis of a thread on any answers, before they waste students welfare money

Thanks (1)