Not sufficiently integrated

Eligibility of a commercial college for the VAT education exemption

The University of Wales had accredited the taxpayer a commercial organisation as a provider of education to prepare and examine candidates for some of its courses. It claimed that its services were exempt from VAT on the basis that it was an eligible body (VATA 1994 Sch 9 group 6 note (1)(b)). HMRC disagreed.

The First-tier Tribunal and the Upper Tribunal held that the taxpayer was not entitled to the VAT education exemption because it was not an integrated part of the university.

The taxpayer appealed saying the UK had failed to implement EU law correctly.

The EU legislation requires member states to exempt university education from VAT but the service has to be provided either by bodies governed by public law ‘or by other organisations recognised by the member state concerned as having similar objects’....