The First Tier Tribunal has released its decision in the University of Newcastle case in relation to VAT on overseas agents. The points considered by the Tribunal were:

1. Whether there was a supply to both the university and to the student – this argument affected supplies throughout the period of the claim and on an ongoing basis
2. Whether the place of supply of the service to the University followed the general place of supply rules such that prior to 1 January 2010 the place of supply was outside the EU and hence there was no cost in the UK
3. If there was a supply in the UK (historically and an ongoing basis) whether the VAT incurred could be treated as residual input tax.

The Tribunal judge concluded:

1. Agents make a single supply of services to the University and make no supplies to students
2. The place of those supplies for the periods in question was determined by reference to the general rule in Article 43 PVD. It is where the agents were established. Article 44 had no application because the agents did not act in the name and on behalf of the University
3. The University is not entitled to recover as input tax VAT for which it is required to account by means of a reverse charge. There is no direct and immediate link between the commission paid to agents and any taxable output of the University or the economic activities of the University as a whole.

To that extent  the appeal was therefore allowed in principle. If the parties are unable to quantify the sum due to or from the University in relation to any accounting period under appeal then each shall have permission to apply to the Tribunal within 90 days from the date of release of this decision.