Can HNC and HND delivery partners reclaim VAT after St Patrick's?

Why HNCs and HNDs

HNCs and HNDs are higher education. An HNC is broadly equivalent to the first year of a degree and an HND to the first two years. Universities and FE colleges teach them VAT free because they are eligible bodies. A private college or delivery partner is not an eligible body, so HMRC's policy is that the same teaching carries VAT at 20%.

The Court of Appeal looked at it from the student's side. If a student would see your HND in business as the same thing as the HND in business at a university or FE college, taxing yours and not theirs breaks the principle of fiscal neutrality. That is the argument the colleges won on, and HNCs and HNDs were at the centre of it.

Teaching for a university or FE college

Many universities and FE colleges bring in private partners to teach HNCs and HNDs for them, under a franchise, subcontract or partnership agreement. The Office for Students publishes data on students taught through these delivery partners each year. If that describes you, two things matter most.

• Who your customer was. If you invoiced the university or college, it may be your customer rather than the students. If the students paid you, or the university collected fees on your behalf, it may be the other way round. The agreement and the payment flows decide.
• Which entity made the supply. Groups often have several companies, and a claim can only be made by the one that accounted for the VAT.

Both affect how a claim is worked out and how HMRC looks at unjust enrichment, so the agreement is the first document our VAT specialist asks for.

Signs the ruling may apply to you

• You are a private company or LLP with no degree-awarding powers and no university title.
• You teach HNCs or HNDs, for your own students or for a university or FE college.
• You have taught them at any point since mid-2022.
• VAT has been charged on that teaching and paid over to HMRC.

When it probably does not apply

• You are registered with the Office for Students in the Approved (fee cap) category. You are already an eligible body, so your teaching should be exempt anyway. If VAT was charged, that is a different error, and still worth putting right.
• No VAT was charged or accounted for on the courses.
• The courses have no real equivalent at universities or FE colleges.

Why the timing matters

A claim can only go back four years from the end of each VAT period, and the Supreme Court is unlikely to decide HMRC's appeal before 2028. Wait for a decision in 2028 and every period before 2024 will be out of time, and those are the periods with the clearest legal footing. That is why providers are making protective claims now. See why claim now.

What a claim involves

1. Map each HNC and HND course to the agreement it was taught under and the entity that invoiced it.
2. Work out the VAT accounted for on that teaching, period by period, from mid-2022.
3. Take off the input tax that would not have been recoverable, using a partial exemption method that fits your business.
4. Gather evidence on pricing for the unjust enrichment question.
5. Tell HMRC about the errors with full workings, then add later periods each year while the appeal runs.

The claim checklist lists the records. The worked examples show how the numbers can come out for a college teaching its own students and for a partner invoicing an FE college.

Sources

1. St Patrick's International College Ltd & Ors v HMRC [2026] EWCA Civ 852: caselaw.nationalarchives.gov.uk
2. First-tier Tribunal [2023] UKFTT 408 (TC), describing the colleges and their courses: caselaw.nationalarchives.gov.uk
3. Revenue and Customs Brief 9 (2026): GOV.UK
4. VAT Notice 701/30, eligible bodies: GOV.UK
5. Office for Students, size and shape of provision data including students taught through partnerships: officeforstudents.org.uk