Following the High Court ruling in Anglia Ruskin Students’ Union v HMRC, the VAT treatment of student-union catering is firmly in focus. The case upheld HMRC’s view that the establishment in question was a “bar”, meaning its catering sales fell outside the relevant extra-statutory concession and were standard-rated for VAT.
HMRC’s published guidance continues to set strict conditions for the concession. In particular, catering supplied from a student bar or campus shop is excluded. In light of the ruling, student unions may wish to anticipate closer attention to how their VAT treatment is applied and evidenced.
Why a review matters
VAT compliance is challenging for any organisation. For a not-for-profit, the added considerations around non-business activities and partial exemption can place further demands on finance teams and trustees.
Now is a sensible time to review your VAT position, ensure your records support the treatment adopted and consider whether professional advice would help reduce the risk of penalties if HMRC were to review your affairs.
Areas to consider
- Whether catering concessions are being applied only where appropriate.
- Whether the methodology used to restrict non-business input VAT is documented and consistently applied.
- Whether VAT rates are being applied correctly to transactions with student clubs and societies that fall within the scope of VAT.
VAT assessments can be retrospective, commonly covering up to four years in cases not involving deliberate behaviour. A proactive review can help identify and address issues early.
Please note: This article is general information, not tax advice. Each organisation’s VAT position depends on its specific activities and circumstances.