FE colleges and other education providers which provide goods or services to the public in the course of education or vocational training undertaken by their students should consider whether they are entitled to a refund of VAT.
HMRC have published a briefing note (RCB 39 (2014)) in connection with this issue and have invited affected providers to consider lodging a claim.
HMRC’s response follows a second Tribunal defeat. The Tribunal held that activities such as catering provided to third parties by students as part of their course are exempt supplies. Many colleges will have accounted for VAT on these sales and may wish to lodge a claim for VAT overpaid.
HMRC have, however, stated that then have appealed the Tribunal’s decisions to the Court of Appeal. As a result, any repayments will be accompanied by a protective assessment for the tax which will be enforced if HMRC subsequently wins the appeal.
If you think you might be eligible for a refund as a result of these decisions, please feel free to get in touch to discuss the options.