HMRC published Revenue and Customs Brief 3 (2026) on 27 April 2026, setting out its response to the Court of Appeal ruling in Colchester Institute Corporation (CIC) [2026] EWCA Civ 363 concerning VAT treatment of public funding received by further education institutions.

The brief explains HMRC's administrative position following the Court of Appeal judgment released on 27 March 2026. The ruling addresses the VAT treatment of certain public funds received by further education institutions, though specific details of the court's findings and HMRC's revised approach are contained within the brief's detailed guidance.

Further education institutions receiving public funding will need to review their VAT treatment in light of both the court ruling and HMRC's updated administrative guidance. The brief represents HMRC's formal response to judicial interpretation of VAT law as it applies to the education sector's public funding arrangements.