Lennartz and further education colleges

In Colchester Institute Corporation [2018] TC 06657, the First-tier Tribunal (FTT) dismissed an appeal against a decision of HMRC refusing to repay overpaid value added tax (VAT) in respect of deductions under the Lennartz mechanism. The provision of grant-funded education and vocational training was not an economic activity and the College was required to account for output tax under the Lennartz mechanism.