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.
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:
clubs and societies committee
preparation for elected positions
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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James has over 30 years experience in VAT having trained with HM Customs & Excise he has worked in practice, including a Big Four firm as well as running his own consultancy. He also has extensive experience in public sector VAT, as well as previously advising the Federation of small businesses.