Supplies of education

Zero-rating claim on the construction of a building for a charity

The taxpayer a charity provided higher and further education. It had a new building constructed and claimed it should be zero rated (VATA 1994 Sch 8 group 5). HMRC refused on the basis that some of the college’s supplies were made in the course of a business.

The appeal was dismissed by the First-tier Tribunal but remitted by the Upper Tribunal in December 2011 for it to consider whether there was a de minimis business use. However when the case returned to the First-tier Tribunal the college did not ask for a determination on that issue. Instead it said that the provision of education was not a supply in the course of business because the link between the tuition fees and the courses was insufficiently direct for the fees to amount to consideration....