The appeal by HMRC relates to a Fleming claim by Imperial College to recover residual VAT on overheads of academic departments and whether HMRC approved a new non-CVCP retrospective partial exemption special method (PESM) from 1973 to 1994 and whether a combined PESM and business/non-business method was ultra vires.

The Upper Tribunal has confirmed the FTT’s ruling that HMRC both could and had agreed a method of apportionment that covered both Business/Non-Business and partial exemption: that prior to 2011 (when the law became explicit on the point) HMRC had the power to do so via a combination of the special method rules and their powers of care and management.

The full judgment can be read here.