17 April 2013

School Charges to External Consumers - VAT

Graham Elliott
Consultant | UK

In the case of Brockenhurst College the charges were for catering provided by their students to friends and family, and charges for admission to school concerts.

The College argued that the supplies were exempt as part of an education supply to pupils (or to be exact, a supply ‘ancillary’ to their education). HMRC argued that the supplies were of catering and of admission to a performance and not of education. The tribunal agreed with the College. In the circumstances it saw these as ancillary supplies and thus exempt from VAT. The purpose of catering (for instance) was to educate the student and the consumer did not make the purchase in order to obtain a meal.

The decision is fairly revolutionary and it seems inevitable that HMRC will appeal. However there is an apparent irony in them arguing that one ought to look at the form of the supply rather than the wider purpose for making it, since they emphasise the ‘purposive’ approach where it suits them.

Graham Elliott Consultant | London

Category: Article