Ordinarily a supply is assessed in terms of “what service is received” by the customer. Irrespective of the motive of the supplier, customers visiting a student operated restaurant or salon are not themselves receiving education (as HMRC argued unsuccessfully in the Brockenhurst case).
Article 134(b) was not written into UK law, presumably because the need to do so was not envisaged. There is a long-standing principle that EU law can be used to interpret ambiguities in UK law but HMRC cannot act as if EU law applies simply because it failed to adopt it correctly into domestic legislation. If it is now necessary to pretend the UK law contains an enactment of Article 134(b) that seems to cross a boundary. Logically, one would also need to consider the “basic purpose” of all supplies covered by Article 134(b), not only supplies within one narrow subset. There are in UK law nine different Items within Group 5 to Schedule 9 VAT Act 1994 (Education) and Article 134(b) covers several exemptions, not only education.
Source Constable
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