TC09497 - [2025] UKFTT 00460 (TC)

In Finance and Business Training Ltd v Revenue and Customs Commissioners [2016] EWCA Civ 7, the Court of Appeal observed that “the question whether a person is entitled to the education exemption is objective, to be determined if necessary by the court.”

In The Commissioners for Her Majesty’s Revenue and Customs v Metropolitan International Schools Ltd [2017] UKUT 431 (TCC) (“MIS”), the Upper Tribunal considered the characterisation of supplies consisting of more than one element in the context of whether distance learning services to customers should be treated as a single zero rated supply of books or as standard rated for VAT purposes. The court considered the relevant case law, including in particular the European case Mesto Zamberk v Financni reditelstvi v Hradci Kralove [2014] STC 1703 (“Mesto”). The UT concluded that:

We understood from MIS that the Mesto predominance test requires all the circumstances in which the supply takes place to be taken into account in order to ascertain the characteristics of the supply and the identification of its predominant elements. This required an overall assessment of the nature of the supplies, taking into account the qualitative and quantitative of the elements of the supply.

We also noted that in MIS, having concluded that the supplies in that case did not fall to within the category of zero-rating supplies, the Tribunal stated:

“It is unnecessary to go further and identify another characteristic which does characterise the supply…but if we had to do so we would characterise the supply, in the eyes of the typical consumer, as the supply of educational services.”

Our conclusion was that the test we should use for determining the character of GM's supplies was an objective test, determining how their supplies would be characterised by the typical consumer.