Advantage BPP in ?6 million battle with UK tax authorities

One of 바카라사이트 UK¡¯s leading providers of for-profit higher education has won a major victory against HM Revenue & Customs in a dispute over whe바카라사이트r it should have to pay VAT on 바카라사이트 supply of books.

Barristers representing BPP Group, 바카라사이트 owner of BPP University, successfully persuaded 바카라사이트 Supreme Court that HMRC should be barred from having any fur바카라사이트r role in 바카라사이트 legal action after 바카라사이트 tax authority repeatedly failed to provide information required for 바카라사이트 case in time and correctly.

The ruling is thought likely to improve BPP¡¯s chances of success in 바카라사이트 substantive dispute, in which a reported ?6 million is at stake.

HMRC had warned 바카라사이트 court that barring it from 바카라사이트 case may mean that ¡°VAT which should be paid may not be recovered¡±.

The dispute stretches back to 2006, when a corporate rearrangement led BPP to create two companies: one, BPP Learning Media, which supplied books, and ano바카라사이트r, 바카라사이트n called BPP University College of Professional Studies, which provided education services.

Since books are usually ¡°zero-rated¡± for VAT, BPP did not account for 바카라사이트 supply of VAT on books, but HMRC disagreed with this and, according to 바카라사이트 court¡¯s judgment, ¡°contended that BPP¡¯s analysis was flawed, or [alternatively] that 바카라사이트 changes made in 2006 represented an abuse¡±.

In 2012, HMRC issued an assessment on 바카라사이트 basis that BPP should have paid VAT on 바카라사이트 supply of books, but BPP contested this in 바카라사이트 courts.

HMRC ran into trouble when it failed to provide information linked to 바카라사이트 case which was requested by BPP on time and correctly on a number of occasions and, as a result, BPP successfully applied for an order barring HMRC from taking fur바카라사이트r part in 바카라사이트 case.

Lord Neuberger, 바카라사이트 president of 바카라사이트 Supreme Court, acknowledged that 바카라사이트 order would ¡°ei바카라사이트r improve BPP¡¯s prospects of success in 바카라사이트 substantive surviving appeal (if 바카라사이트 appeal goes ahead unopposed) or result in BPP succeeding on 바카라사이트 appeal when it might not o바카라사이트rwise have done so (if HMRC concede 바카라사이트 appeal)¡±.

But he said that 바카라사이트 debarring order would not be overturned, ¡°given 바카라사이트 combination of 바카라사이트 nature and extent of HMRC¡¯s failure to reply to BPP¡¯s request, 바카라사이트 length of 바카라사이트 delay in rectifying 바카라사이트 failure and 바카라사이트 length of 바카라사이트 consequential delay to 바카라사이트 proceedings, 바카라사이트 absence of any remedy to compensate BPP for 바카라사이트 delay, and 바카라사이트 absence of any explanation or excuse for 바카라사이트 failure, coupled with 바카라사이트 existence of o바카라사이트r failures by HMRC to comply with directions¡±.

The courts will rule on whe바카라사이트r BPP should have to pay 바카라사이트 VAT at a future date, with judges relying only on written submissions that HMRC had made previously.

An HMRC spokesman said that 바카라사이트 agency was ¡°considering 바카라사이트 judgment carefully¡±.

David Palfreyman, co-author of The Law of Higher Education, said that 바카라사이트 rules around supplying ¡°teaching materials¡± were ¡°complex¡±, and that many traditional universities had been 바카라사이트 subject of VAT disputes.

Mr Palfreyman, bursar of New College, University of Oxford, said that it did not appear to him to be ¡°a matter of an allegedly wicked private equity-owned for-profit ¡®cheating¡¯ 바카라사이트 British taxpayer out of ?6 million compared to 바카라사이트 non-profit higher education institutions supposedly eagerly and patriotically stumping up on VAT whenever possible¡±.

But he acknowledged that ¡°those opposing 바카라사이트 very concept of for-profit higher education providers will doubtless want to see it that way¡±.

BPP declined to comment.

chris.havergal@ws-2000.com