News
Customs news
Distance learning
Customs will be petitioning the House of Lords to review the Court of Appeal decision, handed down on 11 August, in College of Estate Management v Commissioners of Customs and Excise (see following page).
News
Customs news
Distance learning
Customs will be petitioning the House of Lords to review the Court of Appeal decision, handed down on 11 August, in College of Estate Management v Commissioners of Customs and Excise (see following page).
Customs believe that the supply of a distance-learning course of the type provided by the college is a single supply of education. However, until this issue is finally settled, the effect of this judgment is to allow distance-learning providers that make supplies of a similar nature to the college to treat this type of supply as a multiple one. If the supply is of exempt education (i.e. the provider is an eligible body as defined in Note 1 of Group 6 of Schedule 9 to the VAT Act 1994) they will be able to make claims to recover any input tax attributable to the element of printed matter involved in making their supply of distance learning courses. If the supply is of standard-rated education, then part of the supply, e.g. some printed matter, could become zero rated. However, until the matter is finalised, Customs will issue assessments for the input tax they contend is overpaid to traders. No action will be taken to enforce payment of such assessments until the final outcome of the College of Estate Management case is known, but if the final decision is in Customs' favour, they will require repayment of the tax claimed and interest.
Affected businesses may make a claim for the input tax that their business would have been allowed to recover, or for possible overpaid output tax, by using one of the following methods:
* If the net value of all adjustments is £2,000 or less in the relevant accounting period, businesses may amend their VAT account and include the value of the adjustment on their current VAT return.
* If the net value of all adjustments is more than £2,000, a separate claim for payment should be submitted to the local business advice centre (businesses may not make this adjustment on their VAT return).
(Customs Business Brief 22/2004 dated 12 August 2004.)