In Colchester Institute Corporation v HMRC [2020] UKUT 0368, the Upper Tribunal held that funding provided to a college by government agencies constitutes an economic activity for VAT purposes. 

Colchester Institute Corporation (CIC) is a further education college providing further and higher education courses to over 11,000 students.

The dispute centred around a claim for overpaid output VAT amounting to £1.5 million.

The FTT Dismissed the college’s appeal finding that the provision of government-funded education was not an economic activity.


The Upper Tribunal noted that this appeal was a lead case behind which a number of other education appeals were stayed. The decision of this case could have wide-ranging implications in the educational sector and any charity receiving government agency grants.  

Useful guides on this topic

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

Mixed supplies: Single or Multiple supply?
Is a mixed supply a single or multiple supply for VAT purposes? What tests and case law apply?

Funded education not an economic activity
In Colchester Institute Corporation v HMRC [2018] TC06657, the First Tier Tribunal (FTT) found that the provision of education to the extent it is funded by funding agencies is not an economic activity for VAT.

External Links  

Colchester Institute Corporation v HMRC [2020] UKUT 0368 (TCC)

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