Overseas university's services outside scope of VAT

In St George’s University v HMRC [2021] TC 07999, the First Tier Tribunal (FTT) ruled that the place of supply of educational services by a West Indies' university based overseas, which were undertaken in the UK, was based in West Indies and therefore outside the scope of VAT.

St George’s University (SGU) is a university that is based in Grenada, West Indies.

• SGU offers a four-year medical degree course and students can opt to complete parts of the course in the UK.
• The education services are provided by the University of Northumbria (UNN) in Newcastle and the teaching hospital NHS Trusts under a contractual agreement with the SGU.
• In a decision dated 15 May 2017, and upheld in a review letter dated 15 February 2018, HMRC determined that SGU was liable to be Registered for VAT. This was on the basis that it made taxable supplies of education to its students in the UK and as it was not a UK university or college, its supply of educational services did not qualify for exemption as an eligible body.

SGU argued that:

• The Supplies of education and vocational training in the UK are made to the students by UNN and/or the NHS Trust which operates the teaching hospital and therefore are eligible bodies to qualify for exemption.
• If SGU is the supplier of educational services, then the services are outside the scope of UK VAT.

HMRC contended that:

• The contracts between SGU and the students, together with general commercial and economic realities, show that SGU supplies the services and the place of supply is the UK.
• The educational activities actually occur in the UK.

SGU disagreed with HMRC’s decision and appealed to the FTT.

The FTT considered the contractual arrangements and found:

• That SGU was the supplier of the education but concluded that the place of supply is in West Indies where the University was based.
• As a result, the supplies were outside the scope of UK VAT.

The appeal was allowed.  

Useful guides on the topic

Education & VAT
What rate of VAT applies to education? What sort of services are classed as education? What do you do if your have multiple supplies including education? What cases are there on VAT and education?

Place of supply: services
The place of supply (POS) of a service determines whether the supply is within the scope of UK VAT and whether VAT is payable on that supply.

Place of supply: goods
VAT on goods is determined by the place of supply (POS); whether they are UK based supplies, imports, exports, EU dispatches, or EU acquisitions.

External link

St George’s University v HMRC [2021] TC 07999