VAT rate applicable to supplies of manuals

16 January 2020

Issue: 4728 / Categories: Tax cases

The Queen (on the application of Metropolitan International Schools Ltd) v CRC, Upper Tribunal (Tax and Chancery Chamber), 30 December 2019

The Metropolitan School provided distance learning courses. In a letter of 2000 HMRC had accepted that course fees should be apportioned on the basis that the school was making standard-rated supplies of educational services and zero-rated supplies of books. The letter warned that the method could be reviewed ‘at any time’.

In August 2009 after the House of Lords’ decision in CRC v College of Estate Management [2005] STC 1597 HMRC told the school its supplies were taxable. It said the school should account for VAT on all its supplies from September 2009. Further it refused to allow a transitional period so that the school could continue to use the approach agreed in 2000 for a run-off period in relation to contracts that it had entered into before 27 August 2009.

The school sought an order preventing HMRC from collecting VAT on a basis different from...

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