The Court of Appeal ruled that public funds paid to further education institutions are third‑party consideration for the supply of education, placing them within the scope of VAT but exempt. HMRC accepts the judgment, will not pursue a further appeal, and maintains the current position pending consultation, meaning institutions can continue their existing VAT treatment until any future policy change applies prospectively.
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Key Takeaways
The Court confirmed that such funds are third‑party consideration for the supply of education, placing them within the scope of VAT but still exempt.
No, HMRC accepts the judgment, will not pursue further appeal, and maintains the current position pending consultation; any policy change will apply prospectively only.
Institutions may continue to apply their existing VAT treatment; those that have adopted the third‑party consideration position should continue to do so until any future policy change.
Primary source
Read the full article at WithersThis summary was published on VATfaqs.com on 20 June 2026. It relates to VAT developments in United Kingdom. The original source is Withers.
