In Loughborough Students’ Union v HMRC [2018] UKUT 3434, the Upper Tribunal (UT) decided that sales of stationery, art materials and other items from student union shops were not exempt supplies closely related to education.

  • LSU made a claim for VAT repayment relating to supplies made in the student union campus shops.
  • The claim was on the basis that standard rated VAT had previously been applied to sales, which should be considered supplies closely related to the supply of Education and exempt.

The First-Tier Tribunal found that the services could not be exempt and LSU appealed to the UT. The UT found as follows:

  • The LSU may qualify as an eligible body for the purposes of the education exemption:
    • It can and does make surpluses
    • It is a registered charity so is precluded from distribubting those surpluses.
    • Any surpluses are assigned to the continuance or improvement of LSU's activities.
  • The closely related supplies have to be provided by or to the eligible body making the principal supply:
    • LSU are not making a principal supply of education.
    • LSU are not supplying the eligible body making the principal supply (the University).
    • LSU are supplying individual students (and non-students) that use the shops.
  • The supplies must be closely related to education:
    • Supplies such as food, newspapers, and household goods are ends in themselves.
    • The education provided by the University would be just as good with or without the above.
    • In the case of arts materials and stationery, the LSU had not shown, with sufficient evidence, that these were related to course work.

LSU’s appeal was dismissed. The services were not sufficiently evidenced as closely related to education and they were not supplied to or by the University (eligible body making the principal supply of education).


Education & VAT

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Loughborough Students’ Union v HMRC [2018] UKUT 3434