The taxpayers were alternative providers of higher education. They considered that their supplies should be treated as exempt from VAT but HMRC considered them to be standard rated. The First-tier Tribunal dismissed their appeal so they proceeded to the Upper Tribunal.
It was accepted that teaching English as a foreign language was exempt – as supplied by one of the colleges – but the issue was whether all of that college’s supplies should be exempt. According to VATA 1994 Sch 9 Group 6 note 2 a supplier that meets the condition in note 1 only because it supplies tuition in English as a foreign language will not have other unrelated supplies of education treated as exempt. The taxpayers said note 2 was not compatible with the EU legislation but the Upper Tribunal did not agree. It said the First-tier Tribunal had been correct to find the college...
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