The court was asked ‘Does EU law mean that a provider of university courses is entitled to the education exemption from VAT in the same way as a university even if not so entitled under UK VAT law?’ The FTT decided it was not. Although it supplied a university education, FBT also had to show that it was an integrated part of the university, and that it had failed to do. In reaching this conclusion, the FTT applied the SFM factors and attached particular weight to the nature of the relationship between FBT and the university, which it found to be short term, commercial and held out as being one of partnership. An appeal to the UT was dismissed.
Held:
it was argued by FBT, among other things, that Parliament had failed to set conditions for the education exemption in accordance with EU law and, in particular, the principles of legal certainty and fiscal neutrality. Arden LJ (with whom Gloster and Sharp LJJ agreed), rejected that submission. She explained that it was up to each member state to set the conditions under which bodies not governed by public law would be entitled to the education exemption, and how it did so was a matter for national law. It was therefore open to Parliament to decide which non-public bodies would qualify, and it had done so in Note (1)(b). However, Parliament was constrained by article 132(1)(i) as to which bodies it could include. She continued, at paras 55 to 57:
‘ . . In those circumstances, it has taken the view that the body must be one which provides education in like manner to a body governed by public law, that is, there must be a public interest element in its work. It has decided to draw the line, in the case of universities to those colleges, halls and schools which are integrated into universities and which are therefore imbued with its objects.
For FBT to show that its exclusion from this group is a breach of the fiscal neutrality principle would require it to say that it belongs to the same class as those institutions which meet the integration test in Note (1)(b). Neither of the tribunals made any findings that would support that conclusion and this court is hearing an appeal only on a point of law.
FBT contends that Parliament has not met the requirements of the EU law principle of legal certainty by setting out criteria which are to apply to determine when non-public bodies seek to enjoy the education exemption. The criteria have to be ‘neutral, abstract and defined in advance’. In my judgment, this is achieved by the combination of note (1)(b) and the SFM factors. These factors are neutral, they are abstract and defined in advance. By applying them, it is possible to know what supplies and which suppliers qualify for exemption.’
Arden, Gloster, Sharp LJJ
[2016] EWCA Civ 7, [2016] STC 2190, [2016] STI 211, [2016] WLR(D) 14, [2016] 4 WLR 47, [2016] BVC 6
Bailii, WLRD
England and Wales
Citing:
At FTTTx – Finance and Business Training Ltd v Revenue and Customs FTTTx 14-Jun-2012
Education – Exemptions – Value Added Tax Act 1994, Sch 9, Group 6, Item 1, Note 1(b )- Exemptions – Whether the Appellant is a college of a university – Whether the Appellant is an eligible body . .
Appeal from – Finance and Business Training Ltd v HM Revenue and Customs UTTC 26-Nov-2013
UTTC Value Added Tax – whether services provided by Appellant exempt under Value Added Tax Act 1994, Schedule 9, Group 6, Item 1 – whether Appellant was ‘an eligible body’ within Note (1)(b)- whether Appellant . .
Leave – Finance and Business Training Ltd v HM Revenue and Customs CA 28-Oct-2014
Application for leave to appeal . .
Cited by:
Cited – SAE Education Ltd v Revenue and Customs SC 20-Mar-2019
Whether College properly part of University
The appellant contended that its supplies of education to students in the United Kingdom were exempt from VAT as a college of Middlesex University. SEL is a subsidiary of SAE Technology Group BV. Both are part of the SAE group of companies which . .
Lists of cited by and citing cases may be incomplete.
VAT, Education
Updated: 23 January 2022; Ref: scu.558931
