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St Patrick’s International College Ltd and others – education – whether supplies exempt – no – taxpayer loss

  • The First-tier Tribunal (FTT) made a complex decision regarding the UK’s education exemption, involving three taxpayers.
  • The FTT considered various issues, including whether UK law properly implemented the Directive, whether the UK definition of an eligible body breached fiscal neutrality, and whether certain education supplies were ultimately charged to funds provided by the Secretary of State.
  • The taxpayers argued that they provided similar services to universities and FE colleges but were denied exemption because the UK bases exemption only on the type of supplier and not the objects of the supplier.
  • The FTT agreed with HMRC that there was no breach of neutrality and that the FEC exemption only applies to non-profit making bodies.
  • The FTT also considered whether a student loan was funds provided by the SoS and whether a body was a college of a university.
  • Finally, the FTT concluded that Note 2 of Group 6 is compatible with EU law, limiting the exemption to teaching English as a foreign language supplies only.

Source KPMG


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