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 trades around the world under the name ‘SAE Institute’. MU is a United Kingdom university within the meaning of the VAT Act, Group 6, Item 1, Note 1(b). It has never had any financial interest in any SAE group company. Nevertheless, the relationship between MU and SAEI has been very close and is a reflection of a series of agreements addressing the nature of that relationship, the validation by MU of SAEI programmes of education and the accreditation of SAE group companies.
There are two issues: 1) whether the Court of Appeal took the correct approach in determining whether SEL was a college of MU for the purposes of Note 1(b) to Item 1, Group 6 of the VAT Act; and 2) if it did not, whether, upon application of the correct test, SEL was such a college.
Held: The appeal succeeded.
(1) whether a body providing education to a university was a ‘college’ was ascertained in the purposes of its educational activities and whether such activities were integrated with the university so that it had the same objects as the university; in that assessment, that, it was relevant to ask whether there was a common understanding that the body was a college, whether it could matriculate students as of the university, whether they were treated as students of the university during their studies, whether the courses provided were approved by the university, and whether it could present students for examination for a degree from the university’ Where each such feature was present, it was likely to be a ‘college’ of the university within Group 6, item 1, note (1)(b) in Schedule 9 to the Value Added Tax Act 1994.
(2) The FTT had carried out a careful and comprehensive analysis and there was no ground to interfere with its findings; and its findings justified its conclusion that the taxpayer’s was so integrated into the university that it shared its objects and that it had become and remained a ‘college’ within the meaning of note (1)(b) and was therefore entitled to exemption from VAT.

Lord Reed, Deputy President, Lord Sumption, Lord Briggs, Lady Arden, Lord Kitchin
[2019] UKSC 14, [2019] 3 All ER 934, [2019] STC 768, [2019] WLR(D) 168, [2019] 1 WLR 2219, UKSC 2017/0158, [2019] STI 855, [2019] BVC 13
Bailii, Bailii Summary, WLRD, SC, SC Summary, SC Video Summary, SC 18 Oct 30 am Video, SC 18 Oct 30 pm Video
Value Added Tax Act 1994
England and Wales
At FTTTxSAE Education Ltd v Revenue and Customs FTTTx 28-Feb-2014
VAT – Exemption – Company providing educational courses to students – succession of agreements between company and university – whether supply of educational courses by company exempt – whether courses supplied by eligible body – whether company a . .
At UTTTxRevenue and Customs v SAE Education Ltd UTTC 25-Apr-2016
UTTC VALUE ADDED TAX – exempt supplies – education – PVD arts 131-133 – Note (1)(b) Item 1 Gp 6 Sch 9 Value Added Tax Act 1994 – whether education provided by ‘eligible body’ – whether respondent a college of a . .
Appeal fromSAE Education Ltd v Revenue and Customs CA 28-Jul-2017
. .
CitedFinance and Business Training Ltd v Revenue and Customs CA 19-Jan-2016
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 . .
CitedUniversity of Leicester Students Union v Commissioners of Customs and Excise CA 21-Dec-2001
The student Union supplied soft drinks to students. They claimed this was closely associated with education and that activity was therefore exempt from VAT. The Union appealed a decision against them.
Held: The University charter did not . .
AppliedCustoms and Excise v School of Finance and Management (London) Ltd ChD 30-Nov-2001
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 . .
CitedCommission v France ECJ 11-Jan-2001
(Judgment) Failure by a Member State to fulfil its obligations – Sixth VAT Directive – Article 13(A)(1)(b) – Closely related activities – Concept . .

Lists of cited by and citing cases may be incomplete.

VAT, Education

Updated: 23 January 2022; Ref: scu.634788