This part of GOV.UK is being rebuilt – find out what beta means

HMRC internal manual

VAT Business/Non-Business Manual

Clubs and associations: Student Unions activities and input tax recovery


Parent education institutions exempt or treat as non-business supplies of catering to their students. Suppliers of education provided for a fee treat it as exempt. Suppliers of education provided free of charge (usually Further Education colleges) treat catering as non-business.

Student Unions can treat the supply of catering to students in the same way provided:

  • the supply is one of catering; and
  • the supply is made to students (this includes visiting students); and
  • the Student Union is acting as a principal; and
  • it is making the supplies on behalf of and with the knowledge of the parent institution which itself makes supplies of exempt or non-business education.

All of these criteria must be met for a Student Union to be able to do this.

The supplies will be those of the parent education institution if the Student Union is acting as an agent. The service of acting as an agent will be a standard-rated supply by the Student Union in return for its commission.

You should think about the following things:

a. Is the supply one of catering?

This includes catering on premises and hot take-away food.

b. Is the supply made to students?

This includes students from other organisations. Supplies made to any staff or other non- students are standard-rated.

Both the institution and the Union have to account for VAT at the standard rate on all supplies to non-students. This can be done either at point of sale or by using a method of apportionment agreed with HMRC.

c. Is the Union acting as principal?

If the Union is acting as agent the supplies are those of the parent education institution. Any fees charged by the Union for acting as agent are standard-rated.

If there are any doubts about who is acting as principal you should speak to the parent education institution.

d. Is the Union acting on behalf of and with the knowledge of the parent institution?

Again, if there are any doubts, these can be clarified with the parent institution. There should be a record of any discussions relating to health and safety, insurance, and so on if the Union is using the institution’s facilities to make these supplies. Where the Union is simply allowed to occupy land, this is not acting on behalf of and with the knowledge of the parent institution.


Rags are sometimes organised by separate rag societies. If this is the case, follow the guidance given at VBNB60960 about Student Union clubs and societies.

Voluntary donations to charities collected in the course of rag weeks are not consideration for supplies and are outside the scope of VAT.

Income is raised by sales of goods or services such as rag magazines is taxable in accordance with normal VAT rules.

One-off fund-raising events

The Union may qualify for this exemption if it is a charity. The exemption applies to admission charges, sale of commemorative brochures, advertising space in those brochures and other items sold at the event. A full explanation of this is in VAT Notice 701/1 Charities 

Cultural Exemption

The cultural exemption applies to the supply of the right of admission to a theatrical, musical or choreographic performance of a cultural nature put on by an eligible body. In order to be an eligible body, the Student Union must:-

  • supply the right of admission to the performance
  • be non-profit distributing
  • plough the admissions back into the supplies made
  • be managed and administered on an essentially voluntary basis
  • be managed and administered by people who have no direct or indirect financial interest in its activities.

Input tax

Many Unions will have outputs that are exempt or outside the scope of VAT because of the rules on the treatment of grants and catering. A Union is entitled to deduct only the VAT attributable to taxable supplies made in the course of its business.

Where necessary the tax incurred in respect of business and non-business activities, and between input tax attributable to exempt and taxable business supplies, must be apportioned according to the normal rules.