.png)
.png)
News
Tax Case
Books are a separate supply
The College of Estate Management provided post-qualification, distance-learning courses to experienced and qualified practitioners. It provided all necessary written material, none of which was available from another source. Item 1 of Group 3 of Schedule 3 to the VAT Act 1994 provided that printed materials were zero-rated supplies.
News
Tax Case
Books are a separate supply
The College of Estate Management provided post-qualification, distance-learning courses to experienced and qualified practitioners. It provided all necessary written material, none of which was available from another source. Item 1 of Group 3 of Schedule 3 to the VAT Act 1994 provided that printed materials were zero-rated supplies.
Customs said that the college was a provider of a VAT exempt principal service of education. The VAT tribunal and High Court agreed with Customs. The tribunal said that there was a single supply of education to which the supply of written materials was an ancillary element. The college appealed.
The issue before the Court of Appeal was whether there was a separate supply of books or whether the supply of books was part of a single supply of education services.
The Court of Appeal said that the supply of books was physically separate from the supply of education services. It would not be that difficult to calculate the part of the fee that related to the supply of books, and it would not be artificial so to do, since the supplies could be distinguished easily.
Looking objectively at the transaction, students enrolled with the college because the college would supply the required material to them to work and study. It was, furthermore, impossible to deny that the supply of the written material was an end in itself.
The tribunal and judge had been mistaken in treating the matter as a single either/or question, answered by asking if the supply of the written material was a means of better enjoying the education, and not asking first whether or not the supply of books was sufficiently coherent, distinct and independent to constitute an end in itself.
The case was remitted to the tribunal to apportion the price between the respective supplies, and the taxpayer's appeal was allowed.
(College of Estate Management v Commissioners of Customs and Excise, Court of Appeal, 11 August 2004.)
