In Anglia Ruskin Students’ Union v HMRC [2025] EWHC 296 (Admin), an application for judicial review of HMRC’s decision that a student café was a ‘bar’ and therefore did not qualify for a VAT extra-statutory concession exempting sales from VAT was denied. The court found that the cafe was a bar and there was nothing irrational about HMRC's decision-making process in making that conclusion.
Anglia Ruskin Students’ Union (the Union) ran a Café called 92. It claimed that its supplies were exempt for VAT purposes:
- A Supply of education is exempt from VAT.
- A Supply of catering to students by eligible bodies, such as universities, is exempt from VAT for the reason that supplies are ‘closely related’ to the exempt supply of education.
- HMRC make a concession in Section 5.5 of VAT Notice 709/1 that treats the supplies of catering made by student unions as exempt from VAT, but carving out from the concession inter alia supplies of food and drink made in 'bars'.
HMRC decided that 92 is a bar within the carve-out and its supplies of catering do not benefit from exemption from VAT.
The Union argued that on a proper construction of the concession, the Café is not a 'bar'. Alternatively, if it is, HMRC’s policy not to exempt supplies is irrational.
As HMRC's decision not to apply a concession is non-appealable, the Union applied for permission to apply for judicial review
The Court of Appeal found that 92 is a bar:
- 92 describes itself as a bar and café.
- It is somewhere that you can buy and drink alcoholic and other beverages, as well as food.
In terms of HMRC's concession:
- The café meets the definition on the facts including the physical features and accurate self-advertising of the café as a 'bar'.
- The supplies of catering by universities are exempt as a matter of law because they are 'closely related' to the supply of education by an 'eligible body'. It is agreed that student unions are not eligible bodies. Their supplies of catering are treated as exempt by the concession and are analogous to supplies of catering made by other non-eligible bodies.
- That they do not benefit from the 'educational context' of the university is rational because as a matter of law their supplies are not closely related to the supply of education by an eligible body.
The application was rejected: 92 was confirmed to be a bar.
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External link
Anglia Ruskin Students’ Union v HMRC [2025] EWHC 296 (Admin)
