VAT on Further Education: A Looming Crisis?

• HMRC is considering imposing VAT on ESFA funding received by Further Education colleges.
• This uncertainty stems from a 2020 Upper Tribunal decision involving Colchester Institute Corporation.
• The tribunal found that ESFA funding is “consideration” for a supply of services.
• HMRC won the appeal but has not yet implemented the policy.
• A new hearing in the CIC case is scheduled for mid-2025.
• The government has announced that VAT will be applied to fees paid for private school education.
• New legislation will carve out private school education from the VAT exemption.
• A private school is defined as an institution providing full-time education for pupils of compulsory school age or for persons over compulsory school age but under 19.

Source: mha.co.uk

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.

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