Appeal by the Commissioners against a decision of the VAT and Duties Tribunal concluding that the School of Finance and Management (London) Ltd was eligible for exemption as a college of a university under Note 1 to Group 6 of Schedule 9 of the Value Added Tax Act 1994.
Held: The tribunal found that SFM’s fundamental purpose was to provide education services leading to the award of a university degree and that it was fairly to be regarded as a college of the university. On appeal, the Commissioners contended first, that, having regard to the provisions of the Sixth Directive set out above, Note (1)(b) only encompassed bodies governed by public law having education as their aim; secondly, that SFM was not a college; and thirdly, if SFM was a college, it was not a college of a United Kingdom university.
The judge rejected all three contentions and dismissed the appeal. So far as the third was concerned, the parties put forward a non-exhaustive list of 15 relevant factors – termed the ‘SFM factors’ – which fell to be considered. For their part, the Commissioners relied on eight factors, the first four of which were said to be determinative: (i) the presence of a foundation document establishing the college as part of the university by way of a constitutional link; (ii) an absence of independence on the part of the college; (iii) the financial dependence of the college on the university or the financial interdependence of each on the other; (iv) the absence of distributable profit; (v) an entitlement to public funding; (vi) the presence of permanent links between the college and the university; (vii) the physical proximity of the college to the university; and (viii) an obligation on the college to offer a minimum number of university places.
SFM accepted that all of these factors were arguably relevant but argued that none was determinative. It contended that of more relevance were seven further factors: (ix) the possession by the college of a similar purpose to that of the university; (x) the provision by the college of courses leading to a degree from the university; (xi) the supervision by the university of the college’s courses and the regulation by the university of the quality standards of those courses; (xii) the admission of students of the college as members of the university with university identity cards; (xiii) the submission of students of the college to disciplinary regulations and requirements of the university; (xiv) the entitlement of successful students of the college to receive a degree from the university at a university degree ceremony; and (xv) the description of the college as an associate/affiliated college of the university. The Commissioners accepted these were relevant (subject to their submissions as to the determinative nature of the first four of their own features).
Burton J
[2001] EWHC 1175 (Ch), [2001] STI 1663, [2001] STC 1690, [2001] BTC 5030
Bailii
England and Wales
Cited by:
Applied – 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
Updated: 23 January 2022; Ref: scu.518584
