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HMRC internal manual

VAT Education Manual

Group 6 Item 1 Education, research and vocational training provided by eligible bodies: eligible bodies: universities and higher education institutions

Notes (1)(b) and (c) to Group 6 of Schedule 9 of the VAT Act 1994 define as eligible bodies UK universities and other centrally funded higher and further education institutions:

(b) a United Kingdom university, and any college, institution, school or hall of such a university;

(c) an institution -

(i) falling within section 91(3)(a) or (b) or section 91(5)(b) or (c) of the Further and Higher Education Act 1992; or

(ii) which is a designated institution as defined in section 44(2) of the Further and Higher Education (Scotland) Act 1992; or

(iii) managed by a board of management as defined in section 36(l) of the Further and Higher Education (Scotland) Act 1992; or

(iv) to which grants are paid by the Department of Education for Northern Ireland under Article 66(2) of the Education and Libraries (Northern Ireland) Order 1986


Note (1)(c), Group 6 of Schedule 9 of the VAT Act 1994 includes as eligible bodies centrally funded higher and further education institutions. These include further education corporations that left local authority control on, or since, 1 April 1993. It also includes certain other further education organisations, such as the Workers’ Educational Association (WEA).


In a case involving Robert Gordon University (RGU) - Tribunal (V19317) and the Court of Sessions CSIH 22 XA124/05 - RGU had a wholly-owned subsidiary called Univation which provided nursing and midwifery courses to NHS Scotland. As RGU considered Univation was not an eligible body, its supplies were treated as taxable at the standard rate. RGU provided services to Univation which enabled Univation to deliver its courses. RGU contended these services were standard rated as being supplies of staff and administration. RGU sought to recover input tax attributable to these supplies.

HMRC argued that, applying “commercial reality” to the arrangements, the services supplied by RGU to its subsidiary were in fact exempt education. The Court of Sessions held that what RGU “supplied to Univation fell properly to be characterised as a provision of education, just as much as did the supply the university made to the Scottish Executive prior to the arrangements with Univation”.