PEM VAT alert

CJEU releases its judgment in favour of Brockenhurst College.

Brockenhurst College is a F.E. college offering courses in many subjects including catering and performing arts. These courses both involve an element of practical hands-on experience with third parties able to pay to eat restaurant food prepared by students and to attend their performances and concerts.

The College argued that the services provided to the paying customers were closely related to the supply of education provided to the students. As such, the income should be exempt from VAT. HMRC’s view has always been that supplies of goods and services cannot be closely related to education if the recipient is not being educated.

The Advocate General had issued her opinion to the Court agreeing with HMRC that supplies to third party customers were not closely related to the education provided to the students. However, the CJEU has disagreed and held that the supplies will be exempt if certain conditions are met.

It found that the students were clearly benefitting from training provided in a real life setting. It noted that the College’s main objective in making the supplies to third parties is to provide experience to the students; the charges did not cover costs and were not intended to raise additional income. It also recognised that the customers are usually friends and family of the students and so the position is not comparable to a commercial restaurant.

The Court confirmed that the education exemption will apply to supplies made to third parties if the purpose is to improve the student’s education and not to fulfil any separate function. This is good news for F.E. colleges and similar establishments. Any College that has not made a claim should consider doing so.

If you would like to discuss the implications of this case for you, please contact the VAT team ( 


Sarah Davis

Assistant Director, VAT
I am the Assistant Director of the VAT department at PEM. I am a Chartered Tax Advisor with 15 years experience in VAT. I advise a broad range of clients and professionals, covering most aspects of VAT. My main area of expertise is property and construction and I also advise on Stamp Duty Land Tax (SDLT) and the Annual Tax on Enveloped Dwellings (ATED).

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