Court Rules Education Grant Funding Is VAT-Exempt Business Income; HMRC Issues Updated Guidance

• The Court of Appeal ruled that government grant funding for education is “consideration” for a supply and is VAT-exempt business income, not non-business income.
• HMRC will not appeal the decision and has issued updated guidance confirming this treatment will apply prospectively from a future date.
• HMRC will not review or alter historic VAT treatments or reliefs.
• The decision benefits Colchester Institute but creates uncertainty for the wider education sector, potentially affecting VAT reliefs for various education providers.
• Further guidance from HMRC is awaited to clarify the full policy and implications for the sector.

Source: forvismazars.com

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.

---

---