In Essex International College Limited v HMRC [2018] TC06343, the First-Tier Tribunal (FTT) found that the College provided a VAT single supply of standard rated education. It was not an eligible body providing exempt education and it could not separate the books into a zero-rated supply.
- The College is a private limited company and distributes profits to its members.
- Supplies included tuition, reference books and net books.
- The fees paid by students are paid as single fees covering all items.
- Two thirds of the fees were treated as standard rated, one third was taken as zero-rated relating to the books.
- HMRC assessed the company for VAT on the basis they were providing a single supply of standard rated education.
- The College appealed to tribunal on the following bases:
- The supplies were separate supplies, so the books could be zero-rated.
- If it is a single supply, it is a single supply of exempt education provided by an eligible body.
- The UK had failed in domestic law to give effect to obligations to provide free education. These obligations prevented the UK from charging VAT.
The FTT dismissed the appeal:
- As to whether it was a Single or multiple supply:
- A single fee was charged.
- There was no opportunity for a student to receive only one part of the supply and not another.
- The college has not discharged its burden of proof as to whether there is a separate supply. No supporting evidence was provided.
- Based on the facts, it appears as though the supply from an economic point of view is that of a single supply of education to students.
- As to whether it was an eligible body providing exempt supplies of Education:
- The College is not an eligible body under the exemption. It could have been designated as such by the Secretary of State, but it had not been so designated.
- It may provide education to the same economic level as a University but that does not make it a University.
- University should take its normal domestic meaning and the College is not a University.
- Failure to implement international obligations:
- The obligation to provide free education only extends to elementary and fundamental education and this right exists under UK law.
- The law referred to is not directly enforceable in UK courts.
The supply was found to be a single supply of standard rated education.
Links
External link: Essex International College Limited v HMRC [2018] TC06343
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