
In a move that is to be applauded, HMRC has confirmed that it will continue with its existing policy of treating grant funded education as a non-business activity, thus allowing colleges who meet the relevant conditions to continue to benefit from the zero or reduced rate reliefs. HMRC indicate there will be further litigation on this issue and hence the current position may change at some point in the future, but in the interim, this is good news for the sector.
Any organisation that wishes to apply the decision of the Upper Tier Tribunal and to treat Government funding as business income is free to do so, however, that will also mean there will be an adjustment to any zero or reduced rate reliefs that have been claimed.
Should you have any questions regarding this update please contact our VAT Consultancy Partner Socrates Socratous on 0208 037 3113 or socratouss@buzzacott.co.uk
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