VAT News

RCB 8/21 VAT treatment of public funds received by further education institutions


HMRC released Revenue & Customs Brief 8/21 - VAT treatment of public funds received by further education institutions yesterday which provides further clarification on the December 2020 UTT decision in Colchester Institute Corporation UT/2019/0006.  This case successfully argued that grant funded income for further education should  be treated as VAT exempt (i.e. no input VAT recovery) rather than non-business (input VAT recovery allowed, subject to conditions),

Revenue & Customs Brief 8/21 has confirmed two main points:

• HMRC is taking steps to test the primary decision on the exempt VAT treatment of public monies via a new appeal (it is not appealing all outcomes of the CIC case)
• HMRC’s policy concerning grant funded education will remain unchanged whilst this appeal is ongoing and HMRC will not impose the primary decision on any further education institution, meaning that, subject to relevant criteria being met, the input VAT that was recoverable prior to Colchester should still be recoverable.

This is good news for grant-funded education providers as the VAT recovery position on large property projects will remain unchanged for the time being and access to reduced rates on fuel supplies will also continue to apply.

If you need to discuss this further please let us know by contacting us on 0330 124 7740 or by sending an email to Louise Gray or


Further Education VAT Forum Webinar 2021
Wednesday 30th June 2021 at 10.00am
For more information and to book your place please click  HERE


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