Policy paper

VAT liability of supplies of education by alternative providers of higher and further education

Published 2 September 2026

Purpose of this brief

This brief provides an update on HMRC’s position on the VAT treatment of supplies of education and closely related services provided by alternative providers.

It sets out the implications of the Court of Appeal’s decision in St Patrick’s International College and Others Ltd v The Commissioners for HMRC ([2026] EWCA Civ 852).

Who should read this brief 

You should read this brief if you are:

• an alternative provider of higher or further education
• a VAT adviser

Background

The Court of Appeal overruled the previous decisions of the First and Upper tier Tribunals and found in favour of St Patrick’s International College. It concluded that it was bound by an earlier Court of Appeal judgment in the case of Leisure, Independence, Friendship and Enablement Services Ltd (LIFE) ([2020] EWCA Civ 452).

In the LIFE case, the court held that the perspective of the typical consumer is relevant when assessing fiscal neutrality. The court considered that this principle could apply even where the legislation imposes additional qualifying conditions for an exemption from VAT to apply.

This meant that some supplies made by organisations that were not eligible bodies, such as St Patrick’s International College, were exempt from the standard rate of VAT.

HMRC has received permission to appeal the Court of Appeal’s decision to the Supreme Court.

HMRC policy

The education exemption in Group 6 of Schedule 9 to the Value Added Tax Act 1994 applies to supplies of education made by eligible bodies.

Based on this, HMRC’s long-standing policy is that supplies of education made by providers that are not eligible bodies are subject to the standard rate of VAT, and that the perspective of the typical consumer does not apply to alter this position.

Claims

Following the Court of Appeal’s decision, HMRC recognises that some businesses may want to protect their position, pending the outcome of the appeal to the Supreme Court.

Alternative providers who believe they are in the same position as St Patrick’s International College can submit a claim for a refund of VAT.

HMRC will review claims on a case-by-case basis. We’ll take into consideration:

• unjust enrichment
• partial exemption
• whether overdeclared VAT has been correctly accounted for across the supply chain

When calculating a claim, you can proceed on the basis that supplies similar to those in dispute within St Patrick’s International College and Others Ltd v The Commissioners for HMRC may have been exempt from the standard rate of VAT.  

You should also consider:

• any associated input tax you’ve previously recovered
• how the partial exemption rules may affect you

You’ll need to make the appropriate adjustments to your claim, as you can only claim for the net amount.

Any claim remains subject to the normal statutory requirements and time limits.

HMRC will protect its position to secure tax revenues, pending the outcome of the appeal to the Supreme Court.

More information

Read more about how to correct VAT errors and make adjustments or claims in VAT Notice 700/45. This guidance includes:

• section 4 — Correcting VAT errors on a return already submitted
• section 5 — How to claim a refund
• section 9 — Unjust enrichment and the reimbursement scheme

Read more about partial exemption in VAT Notice 706.