28 February 2023 
Matt Sisson, Projects and Membership Manager
HMRC have recently withdrawn from a VAT tribunal hearing concerning an appeal that had been ongoing since early 2020 – which was due to go to hearing the following week.
The Student Union in question had been the subject of an assessment by HMRC during the early part of 2020 – following a visit from an HMRC officer who had collected and reviewed two documents concerning schemes that the Student Union undertook in support of its students. Both schemes were grant funded and supported by the University – to provide peer to peer mentoring support and support around the residential life experience of students in halls of residence. Both grants were provided separately to the main block grant or subvention payment.
HMRC had argued that the documents they had seen during their visit indicated more of a “service level agreement” type contract and that the payment from the University was consideration for a VATable supply of services. Consequently, they raised an assessment on the Student Union for the past 4 years back to 2016.
The Student Union following a request for a reconsideration, appealed the assessments and the subsequent appeal took until early 2023 to reach a hearing date. Late in the week prior to the hearing, HMRC issued a notice to withdraw from the hearing and the appeal has subsequently been allowed in the SU’s favour. Despite the win, the SU in this case had incurred significant costs in preparing for the hearing including Counsel fees and had also put significant amounts of their own time and resource into the case over the last 3 years.
The moral of this story is two-fold – make sure that any legal agreements in place for similar schemes are very carefully drafted so as to reflect the reality of the arrangements in place between Universities and Student Unions – whilst there may be a desire to indicate some parameters within which schemes might be delivered, this is usually under the control of the Union rather than the University – and any indication of “service levels” or “KPI’s” can be very misleading.
And secondly – always remember in a Tribunal situation, HMRC might withdraw at the 11th hour!
