Loughborough Student’s Union (‘LSU’) – VAT Appeal Dismissed by Upper Tribunal

News of the decision was published on the 31^st October 2018 and reported that the Union had failed to persuade the judge that they were entitled to recover VAT paid as Output Tax on the sales of stationery, arts materials and other items sold by the Union in campus shops on the basis that under European VAT legislation it would fall to be VAT Exempt as the provision of goods closely related to the provision of Education.

The Union’s VAT case suggested the UK’s VAT Exemption legislation for Education in Group 6, Schedule 9 VATA 1994 and specifically at Item 4 was too narrowly drawn as it requires - for the exemption on “goods closely related” to education to apply – on the supply being made by the entity who is the principal in making the supply of the education service as well.

The Judge’s concluding comments were that she dismissed the appeal because “even if LSU is an eligible body within the meaning of Note 1 (e), it is not an eligible body making a or the principal supply as required by Item 4 and the supplies for which exemption is sought are not “closely related” to any principal supply, as that term has been interpreted by the European Court”.