Weekly VAT News

Solent Pathway Campus Limited: College of a university – FTT

Solent Pathway Campus Limited (SPCL), a joint venture partnership between Solent University and QAHE (Solent) Limited, provided education courses. SPCL claimed that its supplies were exempt from VAT on the basis that it was providing education as an eligible body (as a college of a UK university) or, alternatively, was making supplies of teaching English as a foreign language (TEFL). HMRC refused SPCL’s claim. The FTT has held that SPCL’s supplies were exempt education services. In determining whether SPCL was a college of a university, the FTT considered the five factors set out by the Supreme Court in SAE Education Ltd and a number of other factors put forward by SPCL, and concluded that SPCL was a college of the University “due to the evident relationship between the … students and the University and the degree to which the activities of SPCL are recognised by and integrated with the University”. SPCL was therefore an eligible body. The FTT went on to consider SPCL’s alternative argument, and concluded that SPCL was making single composite supplies of TEFL, based on the course content, the characteristics of the students (who come from outside the UK, without English as a first language, and were seeking to progress to degree courses at the University), and the qualifications of the tutors. The FTT allowed SPCL’s appeal against HMRC’s refusal of its claim. (Contact: Laurie Pay)

Rushby Dance and Fitness Centre & Ors: Application of the VAT exemption for private tuition – FTT

The FTT has considered together four appeals relating to the VAT exemption for the supply of private tuition in a subject ordinarily taught in a school or university, by an individual teacher acting independently of an employer. In each case, HMRC considered that the exemption did not apply to the dance and fitness classes offered by the appellants, and the appellants appealed against HMRC’s decision to register them for VAT. Three of the appeals concerned whether the classes constituted private tuition in a subject ordinarily taught in schools. The FTT has held that the tuition was not in subjects or activities that were commonly taught in schools or universities. Although some of the classes the appellants offered were dance, they were not the same activity as the subject of dance as commonly taught in schools. The fourth appeal related to the concept of private tuition, that is, whether the appellants, as members of an LLP, were acting on their own account and at their own risk, and hence independently of an employer. The appellant was successful as a matter of principle, but the parties agreed further discussions would be necessary to determine the VAT treatment of the classes offered, including to establish whether they related to activities commonly taught in schools or universities. (Contact: Laurie Pay)

UK-EU – Common Understanding

At a summit in London on 19 May 2025, representatives of the UK government and the European Union agreed a new agenda for bilateral cooperation. The agreement, titled a Common Understanding, outlines a series of initiatives designed to enhance cooperation in trade, security, migration and energy policy. The document provides broad policy commitments and is not a legal text, and much of the granular detail is yet to come. There was agreement to work towards establishing a common Sanitary and Phytosanitary (SPS) area, the aim of which would be to significantly reduce or eliminate the need for routine checks and certification requirements on the movement of most agri-food goods between Great Britain and the EU. Also signaled was a shared ambition to link Emissions Trading Systems (ETS) – a move that the UK government hopes will create a more integrated carbon market and promote investment certainty, while supporting the decarbonisation goals of both geographies. The UK government estimates that the SPS and energy cooperation measures could be worth up to £9bn per year for the UK economy. Other areas covered include people and mobility, security and defence, and broader areas of co-operation with respect to competition regulation, health security, judicial co-operation, irregular migration and research. For Deloitte’s summary of the agreement and what it means for business, see What’s in the New UK-EU ‘Trade Deal’?. (Contact: Henry Morris)

CJEU VAT case calendar

On 12 June, the CJEU will deliver its judgment in Palmstråle on import VAT liability on reimportation where procedural Customs requirements were not met. There will also be an Advocate General opinion released in Galerie Karsten Greve on the application of the VAT margin scheme for works of art.