HMRC published Revenue and Customs Brief 9 (2026) on 2 September. It is short. It is careful. And it is not a quiet housekeeping note.
The Court of Appeal has allowed the appeals in St Patrick’s International College and Others Ltd v HMRC ([2026] EWCA Civ 852). The First-tier Tribunal and Upper Tribunal both went the other way. The Court of Appeal did not. HMRC has permission to go to the Supreme Court. Until then, every CFO with alternative higher or further education in the group — or PE exposure to private colleges, bootcamps, validated degree partners, or “eligible body” edge cases — needs a claims, partial-exemption and pricing lock, not a watching brief.
What actually changed
For years, HMRC’s working assumption has been simple: if you are not an “eligible body” under Group 6 of Schedule 9 to the Value Added Tax Act 1994, your education supplies are standard-rated. Universities, colleges of universities, further education corporations and a short list of other categories get the exemption. Many alternative providers (APs) do not.
The St Patrick’s litigation tested that wall. The colleges argued that UK implementation of the education exemption in Article 132(1)(i) of the Principal VAT Directive breached fiscal neutrality because, from the student’s point of view, their courses met the same needs as exempt university and FEC provision. The FTT dismissed the appeals ([2023] UKFTT 408 (TC)). The Upper Tribunal upheld that result ([2025] UKUT 101 (TCC)). Both lower tribunals treated supplier conditions as something other than a pure consumer-similarity test.
The Court of Appeal reversed on ground 1. Miles LJ (with Henderson and Lewison LJJ agreeing) held that the court was bound by its own earlier decision in Leisure, Independence, Friendship and Enablement Services Ltd v HMRC ([2020] EWCA Civ 452) (“LIFE”). LIFE requires the typical-consumer lens when testing fiscal neutrality, including where the statute imposes supplier conditions. Once that lens applies, HMRC did not contest that excluding APs like St Patrick’s would breach neutrality. Appeal allowed. TEFL-scope and student-loan “Item 5B” points fell away.
That is the hinge RCB 9 is dealing with: not a technical tweak to Notice 701/30, but a live Court of Appeal holding that some non-eligible-body education can be exempt, with the Supreme Court still to speak.
What RCB 9 actually says
Read the brief on GOV.UK. Four operational points matter for the finance function.
1. HMRC has not abandoned its long-standing policy.
Eligible-body supplies remain the core of Group 6. HMRC still says non-eligible providers are normally standard-rated, and that the typical-consumer perspective does not, as a matter of HMRC policy, rewrite that. The brief is not a full retreat.
2. HMRC lost at the Court of Appeal and is protecting the revenue pending the Supreme Court.
Permission to appeal has been granted. Expect HMRC to defend assessments, resist open-ended rewrites of Group 6, and police claims hard.
3. Claims are invited — case by case.
Alternative providers who believe they are “in the same position” as St Patrick’s can claim a refund. HMRC will look at unjust enrichment, partial exemption, and whether output VAT was correctly accounted for up the chain. You claim net, after input-tax and PE adjustments. Statutory time limits still apply. See VAT Notice 700/45 (errors, claims, unjust enrichment) and VAT Notice 706 (partial exemption).
4. Closely related services travel with the education analysis.
If core tuition flips or is contested, accommodation packages, materials, exam admin and “bundle” supplies need a second pass. Do not assume the old standard-rated map still holds line by line.
This is classic HMRC posture after a taxpayer win below the apex court: keep the policy line, open a controlled claims window, reserve the right to reverse if the Supreme Court agrees with HMRC.
Why CFOs outside “colleges” should care
If your only education exposure is a university subsidiary with clean eligible-body status, you can stop at a monitoring note. Most PE and mid-market groups are messier.
- Validated and franchised provision. Private providers delivering university-validated degrees or FE-partnered courses often sit outside Note 1(b)/(c) even when the student experience looks identical. That was the St Patrick’s fact pattern.
- For-profit HE/FE platforms. Bootcamps, professional schools, accountancy/training academies, language-plus-vocational mixes, and overseas-facing campuses frequently fail the eligible-body list while competing for the same learners.
- Corporate academies and apprenticeship partners. Where you sell training as principal, Group 6 and vocational-training edges matter for pricing and recoverability.
- M&A and holdco models. Diligence on education assets still often stops at “are they on the eligible-body list?” RCB 9 makes the second question mandatory: if not, is there a St Patrick’s-style fiscal-neutrality claim, and what happens to net assets if the Supreme Court restores HMRC’s view?
- Partial exemption contagion. Moving outputs from taxable to exempt (even provisionally) is not free money. Recoverable input tax falls. Capital goods and longer-horizon PE special methods can move. A gross claim that ignores PE is a false comfort.
For PE operating partners: model both outcomes. A refund that reverses after Supreme Court is a clawback problem; missing time limits because “HMRC still disagrees” is a different kind of negligence.
The LIFE / Rank thread — keep it tight
You do not need a seminar on EU residual law to brief the audit committee. Three sentences are enough.
The education exemption has always had a supply condition and a supplier condition. HMRC and the lower tribunals treated supplier conditions as largely insulated from the consumer-similarity test in Rank Group. The Court of Appeal, bound by LIFE, says the Rank typical-consumer test still bites when you test whether UK law respects fiscal neutrality. HMRC thinks that is wrong and wants the Supreme Court to say so.
Until the apex court decides, the operational rule is not “everything is exempt.” It is “map your supplies against St Patrick’s, quantify claim vs PE cost, and document the board’s chosen posture.”
Primary materials worth bookmarking: the CoA judgment, the UT decision, LIFE, HMRC’s VAT Education Manual, and VAT Notice 701/30 on education and vocational training.
What to lock this week
Treat this as a two-week control sprint, not a research project.
1. Supply inventory.
List every education, training and “closely related” supply: legal entity, course type, validation/franchise partner, student funding route (SLC, employer, self-pay, overseas), current VAT treatment, and whether the supplier is an eligible body under Group 6 Notes.
2. St Patrick’s proximity test.
For each non-eligible line, record why it is or is not “in the same position”: level/type of course, regulatory designation, competition with university/FEC provision, and student-facing similarity. Vague “we do training” memos will not survive HMRC review.
3. Claims arithmetic.
Build a claim schedule with: periods still in time, output VAT potentially over-declared, input tax previously recovered that must be given back, PE special-method impact, and unjust-enrichment risk where VAT was charged to students or employers who cannot or will not be reimbursed. Use Notice 700/45 sections 4, 5 and 9 deliberately.
4. Pricing and contracts.
If you keep charging VAT “pending Supreme Court,” document that choice. If you stop charging VAT, document the reverse-charge/pricing change, student communications, and how you will handle a later adverse judgment. Silent mid-year flips create both commercial and compliance noise.
5. Partial exemption and systems.
Re-run PE drafts on both “claim succeeds” and “HMRC wins at Supreme Court” bases. Check ERP tax codes, course catalogues, and agency billing so the ledger matches the legal position you are asserting.
6. Governance.
Paper the audit committee: CoA result, HMRC appeal, quantum under each scenario, claim filing plan, and who owns HMRC correspondence. If external counsel already ran the St Patrick’s analysis for a portfolio company, refresh it against RCB 9 rather than recycling 2025 UT-era advice.
What not to do
Do not blanket-reclassify every training line as exempt because “St Patrick’s won.” The decision is fact-sensitive and rests on Court of Appeal authority HMRC is challenging.
Do not file a gross output claim and ignore input tax and PE. HMRC has already flagged netting and unjust enrichment.
Do not wait for a Supreme Court hearing date before protecting time limits. RCB 9 exists because HMRC expects claims now.
Do not treat TEFL or “college of a university” labels as a free pass for the whole catalogue — Note 2 and the failed college arguments already showed how narrow those routes can be.
Bottom line
RCB 9 (2026) is HMRC managing a Court of Appeal loss without surrendering the eligible-body architecture. Inventory the supplies, test proximity to St Patrick’s, run net claim math with PE, fix pricing, and brief the board on both outcomes until the Supreme Court rules.
If education or training is material to revenue, margin or a live deal model, lock the position this month. The brief is dated 2 September 2026. The window is open. It is not indefinite.