Colchester Institute Corporation (No. 2) v HMRC

In Colchester Institute Corporation (No. 2) v HMRC [2024] UKFTT 191 (TC) (4 March 2024) the FTT held that government funding agency grants are consideration for a supply of education and vocational training provided free of charge to students. In making this decision the FTT noted that it was bound by the Upper Tribunal (UT) decision in Colchester Institute Corporation v HMRC [2020] UKUT 368 (TCC).

The above decisions concern different VAT return periods for the appellant but the main issue in both decisions is the VAT treatment of public monies received by a further education institution to fund the provision of education and vocational training.

The appellant recovered VAT on costs it incurred on a building project that did not qualify for the zero rate of VAT and initially accounted for output tax using the Lennartz mechanism. This treatment was possible for non-business activities at the time and F(No. 3)A...

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