“(1) The Secretary of State (in relation to England) or the National Assembly for Wales (in relation to Wales) may give, or make arrangements for the giving of, financial assistance to any person for or in connection with any of the purposes mentioned in subsection (2). (2) Those purposes are— (a) the provision, or proposed provision, in the United Kingdom or elsewhere, of education or of educational services; (b) the provision, or proposed provision, in the United Kingdom or elsewhere, of childcare or of services related to childcare; (c) enabling any person to undertake any course of education, or any course of higher education provided by an institution within the further education sector …” (a) the provision, or proposed provision, in the United Kingdom or elsewhere, of education or of educational services; (b) the provision, or proposed provision, in the United Kingdom or elsewhere, of childcare or of services related to childcare; (c) enabling any person to undertake any course of education, or any course of higher education provided by an institution within the further education sector …”
“We measure the learning delivered by your organisation by counting the number of students and looking at their programme sizes …”
“If we have evidence that you will not deliver a funding allocation or contract value in full, we may reduce the funding allocation or contract value to a level that is in line with your actual delivery. We will take your performance into account when agreeing your funding values for 2016 to 2017. We may adjust your 2016 to 2017 funding allocations or contract values to reflect your final funding claim or final ILR and EAS data for 2015 to 2016.”
“The following transactions shall be subject to VAT: (a) the supply of goods for consideration within the territory of a Member State by a taxable person acting as such; … (c) the supply of services for consideration within the territory of a Member State by a taxable person acting as such.”
“In respect of the supply of goods or services … the taxable amount shall include everything which constitutes consideration obtained or to be obtained by the supplier, in return for the supply, from the customer or a third party, including subsidies directly linked to the price of the supply.”
“In its judgments in Case 154/80 Cöoeperatieve Aardappelenbewaarplaats [1981] ECR 445, paragraph 12, and Case 230/87 Naturally Yours Cosmetics [1988] ECR 6365, paragraph 11, the Court stated on this point that the basis of assessment for a provision of services is everything which makes up the consideration for the service and that a provision of services is therefore taxable only if there is a direct link between the service provided and the consideration received (see also the judgment in Case 102/86 Apple and Pear Development Council v Commissioners of Customs and Excise [1988] ECR 1443, paragraphs 11 and 12).”
“A supply for consideration … requires a legal relationship between the supplier and the recipient, pursuant to which there is reciprocal performance whereby the goods or services are supplied in return for the consideration provided by the recipient … That is what is meant by ‘a direct link’ between the supply of the goods or services and the consideration provided by the recipient ...”
“The court has already held with reference to the concept of the ‘provision of services against payment’ in art 2(a) of the Second Directive … that taxable transactions, within the framework of the VAT system, presuppose the existence of a transaction between the parties in which a price or consideration is stipulated. The court concluded that where a person’s activity consists exclusively in providing services for no direct consideration, there is no basis of assessment and the services are not therefore subject to VAT.” ii) Balgarska natsionalna televizia v Direktor na Direktsia ‘Obzhalvane i danachno-osiguritelna praktika’ – Sofia pri Tsentralno upravlenie na NAP C-21/20,16 September 2021 (“Balgarska”), [33], which observed of the relationship between the provider of a national “free to air” television channel and viewers that: “That provider and those viewers are not linked by any contractual relationship or transaction in which a price was stipulated, or even by a voluntary legal commitment made by one party towards the other.”
“The fixing of the remuneration as described above, which occurs as the person supplying the services in question deploys his or her activities and submits the relevant statements of account to the competent judicial authority, does not in any way prevent the view being taken that the amount thus fixed has been determined in advance and according to well-established criteria, in accordance with the case-law cited in the preceding paragraph above, provided that the procedures for fixing that amount are foreseeable and capable of ensuring that the person supplying services will receive, in principle, payment for those services.”
“The fact that that compensation was determined, as the case may be, not on the basis of individualised services but at a flat rate and annually, so as to cover the operating costs of that company, would not in itself be such as to affect the direct link between the supply of services made and the consideration received (judgment of29 October 2015 , Saudaçor, C-174/14, EU:C:2015:733, paragraph 36). The direct nature of that link could not be called into question by the fact, assuming it were to be established, that the contract at issue contained clauses allowing, in certain circumstances, the amount of compensation to be adjusted; nor by the fact that that amount was fixed at a level lower than the open market value, provided that the amount of compensation was determined in advance on the basis of well-established criteria which ensured that it was sufficient to cover the operating costs of NTN.”
“As the Commission argues, the fact that in the case before the national court the annual membership fee is a fixed sum which cannot be related to each personal use of the golf course does not alter the fact that there is reciprocal performance between the members of a sports association such as that concerned in the main proceedings and the association itself. The services provided by the association are constituted by the making available to its members, on a permanent basis, of sports facilities and the associated advantages and not by particular services provided at the members' request. There is therefore a direct link between the annual membership fees paid by members of a sports association such as that concerned in the main proceedings and the services which it provides.”
“The fact that the purchaser has paid the price agreed not directly to the supplier but through the card issuer and the method of payment used in the relations between the purchaser and the supplier cannot change the taxable amount. It is not a requirement of the Sixth VAT Directive and Directive 2006/112 that, for a supply of goods or services to be effected ‘for consideration’, the consideration for the supply must be obtained directly from the person to whom the goods or services are supplied. Under article 11A(1)(a) of the Sixth VAT Directive and article 73 of Directive 2006/112, the payment of the consideration for a supply of goods may be made not only by the purchaser but also by a third party, in this instance the card issuer … Consequently, the fact that payment of the price of the goods supplied by Dixons within the framework of the transactions at issue in the main proceedings was made by third parties, in the case in point AmEx and Streamline, cannot lead to the conclusion that that payment does not constitute the consideration obtained by Dixons for the supply of those goods.”
“When the Court of Justice speaks of ‘reciprocal performance’ it is looking at the matter from perspective of the supplier of the services and it requires that under the legal arrangement the supplier receives remuneration for the service which it has performed. It is not necessary that the recipient of the service is legally responsible to the supplier for payment of the remuneration; it suffices that the arrangement is for a third party to provide the consideration. Were it otherwise, taxpayers could structure their transactions so as to escape liability to pay VAT, so long as they could meet the economic reality test.”
“There is a difference between agreeing the value of something for the purpose of providing the appropriate level of funding to enable that thing to be carried out, and agreeing the value of a service for the purpose of paying for that service. The mere act of agreeing a value is not therefore decisive of the required mutuality. In this case the negotiation and agreement as to value was a function of the oversight of the arrangements by a funder, and not to provide a monetary exchange for a service provided. The fact that the South African Government received a benefit from the activities of SATB is relevant, but again not decisive. Although the Government received something of value to it, that value was received as an incidental outcome of the ability of SATB to perform its statutory duties by virtue of the funding it had received. There was no relevant reciprocity and accordingly no direct link between the payment and the value received by the Government.”
“Apple and Pear demonstrates that in any particular case there will be likely to be a range of factors to consider and that no one factor is conclusive. Some may point in one direction, some in another.”
“It is clear from the Court's case-law that where, as in the main proceedings, the supply of services in question is characterised, inter alia, by the permanent availability of the service provider to supply, at the appropriate time, the healthcare services required by the residents, it is not necessary, in order to recognise that there is a direct link between that service and the consideration received, to establish that a payment relates to a personalised supply of healthcare at a specific time carried out at the request of a resident (see, to that effect, Kennemer Golf EU:C:2002:200, paragraph 40). Accordingly, the fact, in the main proceedings, that the healthcare provided to residents is neither defined in advance nor personalised and that the payment is made in the form of a lump sum is also not such as to affect the direct link between the supply of services made and the consideration received, the amount of which is determined in advance on the basis of well-established criteria.”
“Where it considers that the case raises no new point of law, the Court may decide, after hearing the Advocate General, that the case shall be determined without a submission from the Advocate General.”
“whether the fixed payment made under a subscription contract for the supply of consulting services … constitutes the consideration for the supply of services agreed, including the commitment to be permanently available to the customer and also to refrain from entering into contracts with its competitors, and whether there is a direct link between the service supplied and the consideration received” the CJEU referred to Rayon d’Or and stated at [38]: “Where the supply of services in question is characterised, inter alia, by the permanent availability of the service provider in order to supply, at the appropriate time, the services required by the customer, it is not necessary, in order to find that there is a direct link between that service and the consideration received, to establish that a payment relates to a personalised supply of services at a specific time carried out at the request of a customer. In each of the cases which gave rise to those judgments, there was a supply of taxable services, to which the fixed sum related, irrespective of the number of services provided and received in each case, namely the number of rounds of golf played or the amount of care provided.”
“Finally, it is clear from the Court’s case-law that where the supply of services in question is characterised, in particular, by the permanent availability of the service provider to supply, at the appropriate time, the services required, it is not necessary, in order to recognise that there is a direct link between that service and the consideration received, to establish that a payment relates to a particular supply of services at a specific time.”
“In the light of the permanent and continuous nature of the planning and management services provided by Saudaçor, the fact that that compensation is determined not on the basis of individualised services but on a flat-rate and annual basis to cover the operating costs of that company is not in itself such as to affect the direct link between the supply of services made and the consideration received, the amount of which is determined in advance on the basis of well-established criteria (see, to that effect, judgment in Le Rayon d'Or, C-151/13, EU:C:2014:185, paragraphs 36 and 37). The existence of that direct link also does not appear to be called into question by the fact that the programme agreements concluded between Saudaçor and the RAA contain clauses which stipulate that the amount of compensation payable to Saudaçor may be adjusted where, because of a change of circumstances, that amount is manifestly insufficient to allow for the performance of those agreements. In so far as those clauses seek to determine in advance the level of that compensation on the basis of well-established criteria which ensure that that level is sufficient to cover the operating costs of Saudaçor, it may be held that those clauses are designed to adapt the amount of the flat-rate consideration for the services provided on a continuous and permanent basis by that company...”
“Thus, it is clear that the Court was not approaching the RCHEs' supplies as some sort of right of access to healthcare, which might be called a Kennemer supply. On the facts of Rayon D’Or, the services in question were healthcare services supplied to the individual residents in due course, and the issue was whether the healthcare lump sum was directly linked with those services.”
“We do not understand the reference at [36] of Rayon d’Or to services which are ‘permanently available’, to be a characterisation of the RCHEs' supplies as Kennemer supplies, as distinct from any other type of supply for VAT purposes; rather, we understand those words to describe the services at issue in Rayon d’Or , namely services provided year on year by the RCHEs to their residents, whoever they may be from time to time, on a rolling basis. The Court's conclusion was that the healthcare lump sum, which was not personalised to any specific supply of healthcare to any particular resident, was still consideration for VAT purposes. Kennemer supported that conclusion, because Kennemer shows that reciprocity can still exist even though the payment in question ‘cannot be related to each personal use …’ (to quote from Kennemer [40], cited at [30] of Rayon d’Or).”
“The solution adopted by the Court in the Le Rayon d’Or case cannot be applied to a public service broadcaster financed by a subsidy from the State budget, since that case concerned services provided to specific recipients in return for which the service provider received remuneration which, although in the form of a lump sum and paid by a person other than the recipient of the services, constituted consideration.”
“In the present case, there is no relationship between the State, which pays a subsidy from its budget in order to finance audiovisual media services, and the viewers, who benefit from those services, which would be analogous to that between a sickness fund and its insured. As has been noted in paragraph 33 of the present judgment, those services do not benefit persons who are likely to be clearly identified, but all potential viewers. In addition, the amount of the subsidy in question is determined by reference to a flat rate per programme hour, and without taking into account the identity or the number of users of the service provided,”
“the fact that payment for the supply of services in question is made in the form of a lump sum is not such as to affect the direct link between the supply of services made and the consideration received.”
“The Court rightly regarded that ‘compensation’ as payment of a consideration (in so far as the patients were still also required to pay a contribution, it would be a price-support payment), since both the supply of services and the recipient, as well as the amount, were ‘determined in advance on the basis of well-established criteria’.”
“The case which gave rise to that judgment concerned the taxable nature of a ‘healthcare lump sum’ which a national sickness insurance fund paid to residential care homes for the elderly for the provision of medical and paramedical services to their residents and the calculation of which took account, inter alia, of the number of residents hosted in each establishment and their dependency level. In the same judgment, the Court held that there was a direct link between the supply of services by such an establishment to its residents and the consideration received, namely that ‘healthcare lump sum’, with the result that such a lump sum payment constituted consideration for the healthcare services provided for consideration by that establishment to its residents and, on that basis, fell within the scope of VAT. … In addition, the Court has held that, where the supply of services in question is characterised, inter alia, by the permanent availability of the service provider to supply, at the appropriate time, the healthcare services required by the residents, it is not necessary, in order to recognise that there is a direct link between that service and the consideration received, to establish that a payment relates to a personalised supply of healthcare at a specific time carried out at the request of a resident … It must be held that the situation at issue in the main proceedings and that giving rise to the case which resulted in the judgment of27 March 2014 , Le Rayon d’Or … are not comparable. As the Advocate General observed in points 52 and 56 of her Opinion, there was, in that case, a direct link between the healthcare services provided to the residents of the residential care home for the elderly and the financial consideration paid to that establishment, determined on the basis of the care received and the number of residents concerned. In the present case, collective public transport services benefit not clearly identifiable individuals, but all potential passengers. In addition, the compensation is calculated without taking into account the identity and number of users of the service supplied.”
“We stand back and test our conclusions against the wider canvass. We note that some students did not benefit from grant funding but were required to pay, in whole (for example international students) or in part (as could be the case on SFA funded courses). The experience for these students was identical to that for the students who attended ‘free’ courses fully funded by the grants. To conclude that all students were in receipt of supplies by CIC, the consideration for those supplies coming from different sources, meets with common sense. If the law drove us to conclude that CIC made supplies only to the extent that a student actually paid for the services, but that otherwise the courses were not supplied for VAT purposes at all – as Mr Mantle suggested was the case – we would of course have to live with that, and with the consequence that within the same classroom CIC could be making business and non-business supplies. But that would be a strained analysis of these straightforward facts. Our conclusion has the advantage of simplicity.”
“the fundamental question of how the subsidisation of a taxable person by a local authority acting in the public interest … is to be treated for VAT purposes. If the subsidy forms part of the consideration for the supply by the taxable person to the subsidy provider or its customers, the taxable person must pay VAT on the subsidy (or the subsidy must be increased accordingly). If, on the other hand, the subsidy is not part of the consideration for a supply (for the subsidy provider or the customers), but a general subsidy for the taxable person, there is no taxable transaction and no VAT is incurred.”
“As a condition of EFA and SFA funding, CIC is required to upload the ILR for each student on a monthly basis to a national Data Service Hub. There are in excess of 200 fields of data for each student.”