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Scholarly decision

28 January 2014 / James Johnson
Issue: 4437 / Categories: Comment & Analysis , VAT

Input tax on management fees for an endowment fund and the University of Cambridge case


  • Recovering VAT under the special partial exemption method.
  • Impact of Kretztechnik AG v Finanzamt Linz.
  • Is a direct and immediate link with the taxable transaction required?
  • Universities should review their VAT position.

The University of Cambridge has an endowment fund and this incurs professional fees that are subject to VAT. The fund earns around £40m a year to add to the group income of £1.26bn.

The university is organised in two ways: the university which provides the infrastructure staff the award of degrees and research; and the colleges which recruit students provide accommodation and pastoral care.

As well as providing exempt education the university has significant taxable income from research consultancy publication sales and the hire of facilities. The colleges earn income from the provision...

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