VAT News

Colleges of a University – can they be an “eligible body” to access the VAT Exemption on Education?

10.10.2017

As commercial partners look to engage with the education sector in terms of developing educational offerings it’s worth a reminder on the specific VAT rules that determine whether the body providing the education would qualify to be regarded as an “eligible body” for the purposes of education. This qualification is key if there is to be a possibility to treat the education they supply as VAT Exempt.

The recent judgement of the Court of Appeal on the position of SAE Education Limited (SEL) as qualifying as a college of Middlesex University (MU) in order to enable it’s supplies of education to be regarded as VAT Exempt gives some insight into the issue.

The three Law Lords, decided, as ever, on the facts of the case and did not agree that “SEL was at the relevant time a college of MU”.

Hence the supplies of education by SEL should have been subject to VAT.

This is not to say that commercial parties cannot engage with universities in such a way as to enable any special purpose vehicle created to be regarded as an “eligible body” but it again points to the need to ensure that arrangements between the parties do factually support the position that any joint venture party is truly seen as a “college” of that university.