HMRC released Revenue & Customs Brief 8/21 – VAT treatment of public funds received by further education institutions yesterday which provides further clarification on the December 2020 UTT decision in Colchester Institute Corporation UT/2019/0006. This case successfully argued that grant funded income for further education should be treated as VAT exempt (i.e. no input VAT recovery) rather than non-business (input VAT recovery allowed, subject to conditions).
Source: centurionvat.com
