New Forest


Brockenhurst College case opens VAT opportunity?

An interesting and potentially important VAT case was won against HMRC by Brockenhurst College at the First Tier Tax Tribunal.

The ruling may pave the way for academies to treat income earned by students as being part of the core, non-business activities of the school and thus achieve the dual benefits of a supply that is outside the scope of VAT, yet still permitting the recovery of any VAT incurred on making that supply.

This case involved supplies made by catering students as part of their studies and the Tribunal accepted that this was a supply closely-related to education, rather than one of standard rated catering, such that the income from the meals sold to the public did not attract a VAT charge.

It will be interesting to see if HMRC appeal the decision.

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The tax break for pubs, restaurants and holiday accommodation has ended, which sees the VAT rate increasing from 5% to 12.5%.

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