Jack Williams (Monckton Chambers) discusses the VAT implications of the Upper Tribunal decision affecting education and other state funded service providers.
In Colchester Institute Corporation v HMRC [2020] UKUT 368 (Colchester) the college had deducted input VAT on building costs under the Lennartz mechanism (which in brief permits businesses to recover input tax in full upfront and account for deemed output tax on future non-business use; see Lennartz v Finanzamt München III (Case C-97/90)). At the time it was thought that the provision of education and vocational services amounted to such non-business supplies so the college and HMRC accounted for deemed output tax. Having done so the college argued that it had in fact overdeclared output tax on the basis that the provision of education and vocational training to students was after all a business activity. That being so ...
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Jack Williams (Monckton Chambers) discusses the VAT implications of the Upper Tribunal decision affecting education and other state funded service providers.
In Colchester Institute Corporation v HMRC [2020] UKUT 368 (Colchester) the college had deducted input VAT on building costs under the Lennartz mechanism (which in brief permits businesses to recover input tax in full upfront and account for deemed output tax on future non-business use; see Lennartz v Finanzamt München III (Case C-97/90)). At the time it was thought that the provision of education and vocational services amounted to such non-business supplies so the college and HMRC accounted for deemed output tax. Having done so the college argued that it had in fact overdeclared output tax on the basis that the provision of education and vocational training to students was after all a business activity. That being so ...
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