University of Newcastle Upon Tyne v HMRC

In University of Newcastle Upon Tyne v HMRC [2017] UKFTT 145 (26 January 2017) the FTT found that the university’s recruitment agencies only made supplies to the university and not to the students they advised so that the full commission paid by the university was liable to VAT under the reverse charge provisions (VATA 1994 s 8).

The university paid a commission to agencies for the recruitment of international students. HMRC contended that the university’s VAT liability arose under the reverse charge provisions. The university argued that the agents’ services were supplied in part to prospective students. It relied on the principle that the consideration for a supply does not need to come from the recipient of the supply (Principal VAT Directive art 73). It also argued by analogy with Baxi (Case C-55/09) that the agents made two supplies:...