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Education Company Refused VAT Exemption


An education company which, amongst its other activities, provides degree-level courses accredited by the University of Wales has failed to convince the Upper Tribunal that that part of its business should be treated as exempt from VAT.


In a case which raised a legal issue on which there was no previous authority, the Tribunal found that it was not permissible to sub-divide the company’s various activities and that it was either ‘a college or institution of a university’ or it was not.


The company argued that the services that it provides to the University of Wales should benefit from the VAT exemption afforded to universities and affiliated colleges and institutions by the Principal VAT Directive and the VAT Act 1994.


However, the Tribunal accepted arguments put forward by HM Revenue and Customs that the company ‘was either an eligible body or it was not’. On a correct interpretation of the legislation, it was ‘not possible to conclude that a body is a college or institution of a university and at the same time that it is not’.