UT/2024/00063 - [2024] UKUT 00397 (TCC)

Colchester Institute Corporation (“CIC”) is a further education corporation providing further and higher education and vocational training programmes to students. This decision concerns HMRC’s appeal against a decision of the First-tier Tribunal (Tax Chamber) (“FTT”) published as Colchester Institute Corporation v HMRC [2024] UKFTT 00191 (“the FTT Decision”). That concerned whether certain grants CIC received from government funded agencies constituted “a supply of services for consideration” (the services being the education and/or vocational training provided free of charge by the college to students) (“the consideration issue”). The Upper Tribunal (“UT”) in Colchester Institute Corporation v HMRC [2020] UKUT 368 (TCC) (“CIC UT 2020”) had previously decided the consideration issue in CIC’s favour, in relation to materially similar grant-funded provision of education and training (but in relation to earlier VAT periods). As that UT decision was binding on the FTT, and the consideration issue was determinative of the appeal, the FTT allowed CIC’s appeal.

With the permission of the FTT, HMRC appeal on the basis that CIC UT 2020 was wrongly decided. Unlike the FTT, the UT is not bound by previous decisions of the UT (Footnote: ¹) but as a matter of judicial comity, the later UT would normally follow an earlier UT decision of co-ordinate jurisdiction unless satisfied the earlier decision was wrong (Footnote: ²). As regards the current appeal, HMRC do not seek to persuade the UT that CIC UT 2020 was wrong, but reserve their right to argue the point in any onward appeal to the Court of Appeal, which as a higher court, is not bound to follow the UT decision and may, HMRC submit, consider the matter afresh. HMRC accept their position means the current appeal before the UT should be dismissed. I decided at the conclusion of the half day hearing which took place that the appeal should be dismissed. This decision notice explains my reasons.