Alternative education providers can protect VAT refund claims

The new Revenue and Customs Brief 9 (2026) follows the Court of Appeal’s decision in St Patrick’s International College and Others Ltd v HMRC. The Court held that, in some circumstances, education supplied by organisations that are not normally treated as eligible bodies can nevertheless qualify for VAT exemption.

HMRC has not changed its underlying policy. It continues to maintain that education supplied by a provider that is not an eligible body is normally standard-rated, and it has obtained permission to appeal the Court of Appeal’s decision to the Supreme Court.

However, HMRC recognises that businesses in a similar position to St Patrick’s may want to protect their position while the appeal is outstanding. Alternative education providers can therefore submit refund claims for VAT they believe was overdeclared, subject to the normal statutory time limits.

HMRC will consider claims individually. Businesses will need to take account of any input VAT previously recovered, the partial exemption rules and whether repayment would result in unjust enrichment. In other words, a claim cannot simply be based on the gross amount of output VAT previously paid; the overall VAT position must be recalculated. Affected education providers should therefore consider whether they need to make a protective claim before any relevant time limits expire. The eventual treatment will depend on the outcome of HMRC’s Supreme Court appeal, but waiting for that judgment could mean older periods fall out of time in the meantime.