A sixth form college in Hampshire has received a £55,000 tax rebate after it was ruled its in-house restaurant should be exempt from VAT.
MJ’s at Brockenhurst College is open to the public and is run by students. It offers discounted meals throughout the week, such as a three-course dinner for as little as £15, according to the Times Editorial Supplement.
A judge ruled at a tribunal last week that the restaurant sought to meet the educational needs of the students and was therefore VAT-exempt. This marks the end of a drawn-out debate with HM Revenue and Customs over whether or not the tax should be charged, as it argued diners were benefiting from the service.
The restaurant does not make a profit and the college described it as “tantamount to a classroom” and run for the benefit of its pupils.
Principal Di Roberts said the rebate – almost four years of VAT – would be used to enhance the college’s catering and hospitality courses.
The deputy chief executive of the Sixth Form Colleges’ Association James Kerwin told TES that while “common sense” had prevailed here, he still wasn’t happy that colleges had to pay VAT when schools and academies didn’t.