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Was this income a business activity or a non-business activity subject to a deemed charge of standard-rated VAT?

By Andrew Needham, October 2025

Summary 

This was an appeal to the First-tier Tribunal (FTT) and by the consent of both parties was determined on the papers provided without a hearing. The appellant was a further education college and appeals assessments made by HMRC that grant income from two government funding agencies, the Education Funding Authority (EFA) and the Skills Funding Agency (SFA) was for VAT purposes, ‘consideration’ for a supply of services (education or vocational training) or a non-business activity provided free of charge by the further education college to students (the consideration point) and therefore subject to VAT at the standard rate as a deemed supply under the Lennartz principle. 

Background 

The appellant is an ‘eligible body’ for the purposes of VATA 1994, Sch 9, Group 6, Item 1. 

The appellant's courses are vocational, with the aim of providing its students

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