- Supplier and Nature of Supply Conditions: Many VAT exemptions require both a supplier condition and specific criteria regarding the nature of the supply, leading to questions about how to assess whether a supplier meets these conditions based on neutrality and comparability.
- Upper Tribunal’s Broader Evaluation Criteria: The Upper Tribunal concluded that the assessment of a supplier’s eligibility is not limited to consumer-related factors but can also consider broader elements such as regulatory frameworks and profit motives, acknowledging the Directive’s provisions for distinguishing between non-profits and commercial entities.
- UK Law on EFL Providers: The Tribunal examined the classification of English as a Foreign Language (EFL) providers as ‘eligible bodies’ only for specific activities, rejecting concerns that this selective eligibility might violate EU law, noting that any potential breach does not automatically confer eligibility on the entire body.
Source Fabian Barth
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- St Patrick’s International College Limited and two other institutions sought VAT exemption for their education services.
- They argued for exemption under the EU Principal VAT Directive or the Value Added Tax Act 1994.
- These institutions are Alternative Providers, not recognized as eligible bodies for VAT exemption.
- HMRC and the Upper Tribunal agreed that VAT exemption did not apply to them.
- The UK can treat Alternative Providers differently from Higher Education Institutions and Further Education Corporations.
- The argument that fees funded by student loans should be exempt was rejected.
- One institution was eligible for VAT exemption for teaching English as a foreign language.
- The Upper Tribunal rejected all arguments and upheld the decision of the First-tier Tribunal.
Source: taxscape.deloitte.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
