Services were not supplied outside the EU

The taxpayer supplied career coaching and support to students of Chinese origin. Before July 2016 the taxpayer supplied its services to the students but after July 2016 it contracted with the student’s parents who were usually resident in China.

It did not account for VAT on the basis that its supplies were consultancy services that were outside the scope of UK VAT because the recipients resided outside the EU. HMRC raised assessments on the basis the taxpayer made supplies of educational activities within article 54 of the Principal VAT Directive and therefore the supply was made where they took place.

The First-tier Tribunal decided the taxpayer made supplies of consultancy services for the purposes of article 59 of the Principal VAT Directive. It allowed the appeal for periods from July 2016 when the contracts were with the parents because their usual residence could be established as...