There have been a flurry of Tribunal cases recently involving FE Colleges which have successfully argued that grant funded education is an exempt (business) supply of education. These cases have followed the Colchester Institute Corporation case decision which we have written about previously and which is the lead litigant challenging whether Government and grant funded education is a business or a non-business activity.
As a brief reminder the Colchester Institute Corporation case concerned with whether Lennartz accounting applied to a college building. CIC successfully argued that granted funded education was a business rather than a non-business supply meaning that Lennartz didn’t apply and that previous output tax adjustments shouldn’t have been made.
The current cases involving Derby College, City of Portsmouth College, CIC (for different VAT periods) and Cornwall College cover the same issues as the original case and are being heard by the First Tier Tribunal pending a Court Of Appeal Hearing between CIC and HMRC which is due to be heard in June 2026.
If you want to discuss any of the points raised above, please contact Xeinadin’s Education Indirect Tax Team directly.
Louise Gray: [email protected] or Kate Connolly: [email protected]
