RCB/27/08 Interpretation of Article 13 of the Principal VAT Directive—“bodies governed by public law” and “special legal regime”
Revenue & Customs Brief, Issue 27. 19 May 2008
HM Revenue and Customs has reconsidered its interpretation of the terms “bodies governed by public law” and “special legal regime” in the context of art 13(1) of the Principal VAT Directive (Directive 2006/112/EC) (“art 13(1)”) as well as the application of this provision.
Our current interpretation is based on the decisions in the Court of Session's judgment in Edinburgh Telford College (ETC)  CSIH 13 XA18/05; XA22/05, the High Court's judgment in Riverside Housing Association (Riverside)  EWHC 2383 (CH) and the decision of the VAT and Duties Tribunal in The Chancellors, Masters and Scholars of the University of Cambridge (Cambridge University) LON/05/0958.
This Revenue & Customs Brief explains HMRCs' current thinking on the matter. While the Brief is of immediate interest to further and higher education providers, it may be relevant to other bodies as well.
1 Legal position
Under art 13(1), “states, regional and local government authorities and other bodies governed by public law” are not regarded as taxable persons when they engage in activities as “public authorities”. Case law has confirmed that such public bodies engage as public authorities when they undertake their duties under a legal regime which applies to them and not to other bodies (a “special legal regime”). This is subject to certain mandatory exclusions and competition criteria.
This provision therefore only applies to the types of body specified, and only in the