Cambridge College wins VAT battle over £7.5m library
Newnham College will not have to pay VAT on its 7.5m library following a ruling by the House of Lords
As an educational supplier, Newnham would have paid VAT on its suppliers’
bills, but not been able to reclaim VAT itself. So the ‘famously poor women’s
college’, as it is referred to in the judgment, opted to set up a company to
build the library that could reclaim the VAT.
The taxman objected to the structure saying that it should be set aside for
tax purposes, but the Law Lords disagreed, saying that it had not been proven
that the college ‘occupied’ the library.
‘The practical physical control of the library premises is in the hands of
the librarian and her staff, who act on behalf of the company.
It is they who have the right to admit or exclude persons from the library
and they do not share this right with the college,’ Lord Hoffman said.