7 July 2014

West of Scotland Colleges Partnership (WOSCOP) has lost its appeal at the VAT Tribunal, in which it was claiming exemption under the cost sharing exemption. The exemption was implemented in 2012 but arguably available before then by virtue of the direct effect of the Principal VAT Directive.
 
WOSCOP was set up many years earlier as a body owned by Scottish colleges, to seek funding from EU sources for those colleges. Its costs were recharged to each member college in equal shares irrespective of the size of each college, and this is how their claim failed. The tribunal decided that this did not meet the test that each member should meet its exact share of the joint expenses. Whilst this case involved a retrospective claim for the years 2008 to 2011, the point is important to note in setting up any future cost sharing group. Some effort needs to be made to establish the exact share attributable to each member.