HMRC has published Revenue and Customs Brief 9 (2026), setting out its response to a Court of Appeal ruling that could change how VAT applies to independent providers of higher and further education. If your organisation runs courses that sit alongside, or compete with, those offered by universities and colleges, it is worth understanding what has changed – and what hasn’t.
The case behind the brief
The brief follows St Patrick’s International College and Others Ltd v HMRC [2026] EWCA Civ 852, a long-running dispute over VAT charged on Higher National Certificate and Higher National Diploma courses provided by three independent colleges. Under Group 6, Schedule 9 of the VAT Act 1994, education is only exempt from VAT when supplied by an “eligible body” – broadly, universities, state schools and colleges, and other not-for-profit providers. Commercial colleges do not usually meet that definition, so the providers in this case had been charging VAT on their courses.
The providers argued this was unfair: their HNC and HND courses, taught between December 2012 and August 2017, were in substance the same kind of qualification offered VAT-free by exempt institutions. Both the First-tier Tribunal and the Upper Tribunal disagreed, finding that UK law properly implemented the underlying EU exemption.
The Court of Appeal allowed the providers’ appeal, but on narrower grounds than the outcome might suggest. Rather than reassessing the evidence itself, the Court held that it was bound by its own earlier decision in a different VAT case (concerning welfare services, not education) which had already established that the “typical consumer” test governs this kind of comparison. Once that test applied, and given that HMRC did not dispute the providers’ courses were similar enough to exempt higher education from a student’s point of view, the appeal had to succeed. Notably, one of the three judges observed that he saw “considerable force” in HMRC’s contrary position, and the lead judgment stopped short of endorsing the outcome on its merits — the case turned on precedent, not a fresh view of the underlying question.
What this means in practice
The ruling doesn’t rewrite the list of who qualifies as an “eligible body,” and it doesn’t create an automatic exemption for every independent college or training provider. Each case still depends on how genuinely comparable a provider’s courses are to exempt higher education from a student’s perspective.
There’s also an important limitation on how far this reaches. The case was decided on the basis that EU law had “direct effect” in the UK during the relevant period – a legal route only available while the UK was bound by EU law. The judgment itself notes, without resolving, the open question of whether that same reasoning is even available for VAT periods after the UK’s exit from the EU. In other words, this ruling gives the clearest support for reviewing historic VAT positions from before Brexit; whether the same argument holds for courses charged VAT today is unsettled, and far from a foregone conclusion.
An appeal by HMRC to the Supreme Court is a realistic possibility. Providers should treat this as a prompt to take advice on their specific position – old and current – not as confirmation that VAT is no longer due.
Who this affects
This matters most for independent colleges, private training providers, and any organisation delivering vocational or academic qualifications outside the mainstream university and state college sector – particularly where those courses run alongside comparable exempt provision, such as HNCs, HNDs, or other qualifications also offered by universities, FE colleges, or their equivalents..
Where we can help
We are part of the UHY Hacker Young network, with VAT specialists across offices throughout the UK. If you run an independent education or training provider, it’s worth taking advice on whether this ruling gives you grounds to review VAT charged in earlier years, and on where things currently stand for VAT on your courses today.
Get in touch with our team to talk it through.