Weekly VAT News

RCB 9 (2026): VAT liability of supplies of education by alternative providers of higher and further education

HMRC have published Revenue and Customs Brief 9 (2026), on HMRC’s position on the VAT treatment of supplies of education by alternative providers of higher and further education. In St Patrick’s International College Limited & Ors, the Court of Appeal held that VAT exemption applied to services supplied by St Patrick’s and two other higher education providers, even though they were not ‘eligible bodies’, on the basis of fiscal neutrality. The CA considered that it was bound by its previous judgment in Leisure, Independence, Friendship and Enablement Services Ltd (LIFE), which held that the perspective of the typical customer is relevant when assessing fiscal neutrality, even where the VAT exemption includes a ‘supplier condition’. The RCB states that HMRC policy continues to be that exemption does not apply to supplies of education by providers that are not ‘eligible bodies’, and “that the perspective of the typical consumer does not apply to alter this position”. HMRC have been granted permission to appeal to the Supreme Court, but recognise that businesses may want to protect their position pending the outcome of the appeal. Accordingly, the RCB states that, “Alternative providers who believe they are in the same position as St Patrick’s International College can submit a claim for a refund of VAT”. Each claim will be reviewed on an individual basis, taking into account unjust enrichment, partial exemption, and the VAT accounted for across the supply chain. (Contact: Laurie Pay)

CBAM update

The UK Carbon Border Adjustment Mechanism (CBAM), which will place a carbon price on specified goods imported into the UK, will come into effect on 1 January 2027. In July 2026, regulations were passed setting out the design and administrative aspects of CBAM. Further regulations on the monitoring, reporting, and verification of emissions will follow. HMRC have published a collection of guidance on preparing for CBAM, and further guidance is expected to be published later in the year. Relief from CBAM will be available with respect to imported goods that have already been subject to an eligible overseas carbon pricing scheme, and HMRC have published a provisional list of qualifying schemes. The EU CBAM entered into its definitive phase on 1 January 2026, and the European Commission has recently published guidance on CBAM verification and a series of guidance documents for non-EU operators, available on its CBAM website. (Contact: Zoe Hawes)

UK Trade Strategy – Deloitte article

In 2025, the government published the UK’s Trade Strategy. Our latest Deloitte Insights article, What do Andy Burnham’s priorities mean for the UK’s trade strategy?, examines the Trade Strategy in light of Prime Minister Andy Burnham’s new economic agenda, which prioritises issues such as economic security, reindustrialisation, and devolution. The article assesses the extent to which the Trade Strategy can support the new Prime Minister’s agenda, and where trade policy might go in a different direction.

This week’s CJEU VAT case calendar

On 9 September, there will be CJEU judgments in Szytelbiecka, a reference from Poland on the transfer of a going concern, and Trading 4, a reference from Latvia on triangulation. On 10 September, there will be a CJEU judgment in P-GmbH & Co. KG, a reference from Germany on the application of the tour operator’s margin scheme.