17 August 2017 
Amanda Darley, Head of Operations and Engagement
Deloitte's Weekly VAT News for 14 August details three tribunal cases which, while not involving educational establishments, could be of interest to universities.
The first case, Temple Retail, deals with splitting a business between an exempt and taxable entity and the resulting recharges and the Upper Tribunal made some useful comments regarding fiscal neutrality which support what was originally said by the ECJ in the Halifax decision: "…the principle of fiscal neutrality does not permit transactions or structures to be recharacterised. In the absence of abuse in the Halifax sense the transactions and structures entered into must be respected."
The Ludbrook Manor case shows the VAT problems which can arise from recharacterising transactions after they have taken place, something of relevance to universities due to the difficulty in characterising some university transactions at all, which can therefore take some time.
And for those universities affected (or getting close to being affected) by the Senior Accounting Officer (SAO) regime, the Kreeson Thathiah First-tier Tribunal (FtT) decision is of interest, partly just because it is the first case about the SAO regime. The FtT allowed the appellant's appeal, despite VAT errors totalling £1.3m (including a failure to apply the reverse charge) and Mr Thathiah’s failure to implement selective or thematic testing (which HMRC argued he should have). The FtT commented that the SAO regime should not be applied identically to all those within the regime as "there is a significant distinction between a company with a small finance team that is just over the qualifying company threshold and (say) a major financial institution with a large tax department, where the SAO may well have a more significant 10 degree of control over resources, and systems and controls can be expected to be sophisticated." Deloitte's Business Tax Briefing provides more detail about this case, including what the judge considered to be 'reasonable steps' for the SAO to take, which included:
