The Court of Appeal has ruled in favour of Colchester Institute in a VAT dispute with HMRC, allowing the college to reclaim VAT on pre‑2010 capital projects. The decision could extend to an estimated 20‑30 other colleges and raises uncertainty for charities that may lose VAT discounts. The ruling centres on the Lennartz mechanism, which HMRC had withdrawn in 2010.
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Greater Birmingham Chambers of Commerce · 2 days ago
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Key Takeaways
It ruled in favour of the college, allowing it to reclaim VAT on capital projects started before 2010.
The classification excluded colleges from zero-VAT on new-build construction projects and 5% rates on fuel and power costs.
In 2010.
An estimated 20 to 30 colleges.
It could cause charities to permanently lose large VAT discounts.
Primary source
Read the full article at FE WeekThis summary was published on VATfaqs.com on 3 April 2026. It relates to VAT developments in United Kingdom. The original source is FE Week.
