TC09595 - [2025] UKFTT 00894 (TC)

Given our conclusion in relation to the s 85 VATA agreement this issue falls away. However, as with the “abuse” issue, as it was argued before us and in case of a further appeal, we shall briefly set out our conclusions in relation to this issue.

The general rule in relation to the place of supply of services are set out in s 7A VATA the relevant parts of which provide:

For present purposes, the relevant paragraph of Schedule 4A is paragraph 14A. This provides:

Paragraph 14A gives effect to what was Article 9 of the Sixth Directive and is now Articles 52 and 54 of the Principal VAT Directive which provides that for educational activities the place of supply shall be the place where those activities are physically carried out.

It is common ground that the provision of training is an educational activity and that this was provided outside the UK, mainly in New Zealand where the cadets were physically present and received that part of the training on location from local instructors.

In Staatssecretaris van Financiën v L W Geelen Case C-568/17 (“Geelan”) the CJEU was concerned with the place of supply of services provided for consideration by Mr Geelen, who was registered for VAT in the Netherlands. Those services consisted of the offer of live interactive erotic webcam sessions, which could be viewed by several customers simultaneously, in which the models filmed were in the Philippines. The models worked for Mr Geelen who provided them with the hardware and software required to broadcast those sessions over the internet. To access the sessions, Mr Geelen’s customers were required to create an account with one of the internet service providers. Those providers received the payments for those sessions from the customers and paid a portion of them to Mr Geelen.

Having noted, at [47], that the supply of services was a “complex supply” rendered by Mr Geelan rather than the models, the Court stated at [50]:

“… since the activities necessary for the supply of those complex services are concentrated in the place from which the provider, on the one hand, organises the interactive sessions relating to the erotic show performed by the models and, on the other hand, provides customers with the opportunity to view those sessions on the internet, from the place of their choice, and to interact with those models, such a complex supply of services must be regarded as being ‘physically carried out’, within the meaning of Article 9(2)(c) of the Sixth Directive, in the place where that service is supplied by that provider, namely, in the case in the main proceedings, the place where his business is established: the Netherlands.”

Such an approach was adopted by the Tribunal (Judge Sinfield) in St Georges University Ltd v HMRC [2021] SFTD 675 (“St Georges University”)in which it was agreed that St Georges University made a single supply of services relating to educational activities which took place in different countries (Grenada and the UK) at different times over a period of four years. At [133] Judge Sinfield observed that although the services were of a “very different nature” the case that appeared to provide the “closest parallel was Geelan. Applying that analysis Judge Sinfield said, at [143]:

“Applying the CJEU’s analysis in Geelen, it seems to me that the supply of the MD Course which, for some SGU [St Georges University] students, includes the GSP [Global Scholars Program which was provided at the campus of the University of Northumbria in Newcastle] and UK Clinical Training Programme, is a complex supply by SGU. Mr Beal was not inclined to accept that SGU was making a complex supply, however, I consider that it is properly described as such. SGU devises, organises and supervises the GSP and UK Clinical Training provided by the UNN and the UK Teaching Hospitals. SGU offers the students the opportunity to take part of the four year MD Course in the UK if they so choose. Where students choose to take part of the MD Course in the UK, SGU’s services are not the performance of the underlying educational activity but the provision to students of the opportunity to take part of the MD Course in the UK and the organisation of the provision of education and training in the UK. I consider that, as in the case of Mr Geelen’s supplies, the place where SGU’s activities actually take place is where it makes all the necessary arrangements for the provision of the GSP and UK Clinical Training to the students, ie Grenada. It follows that SGU’s supplies are outside the scope of UK VAT.”

Ms Shaw submits that unlike Geelan the provision of training in the present case which took place in New Zealand was not a complex supply. She contends that it is readily apparent that L3 NZ operated with a high degree of autonomy over the training provided to the cadets provided on site in New Zealand which, she says, distinguishes the present case from St Georges University in which materials from the university in Grenada were used in the University of Northumbria in Newcastle, the Grenadian University designated the Associate Dean and provided course directorships. It also provided clinical tutors to assist with small group teaching and brought in visiting professors to provide specialist instructions. Accordingly, she submits, that it is necessary to apportion that part of the training that took part in New Zealand.

However, as Mr Watkinson contends, it is apparent from the contractual documentation that it is APL that devises, organises and supervises the training. APL services are not the performance of the underlying training but the provision to the cadets of the opportunity to take part in it and the organisation and the provision of training in the UK and New Zealand. As such, the place where APL’s activities actually take place, is where it makes the necessary arrangements for the provision of that training, ie the UK.

Therefore, as in St Georges University apportionment is not necessary and as we do not consider it to have been wrongly decided and, as a matter of judicial comity, we would, if we had come to a different conclusion regarding the s 85 VATA agreement, have followed Judge Sinfield’s decision in that case.