HMRC v The Chancellor, Masters and Scholars of the University of Cambridge

In HMRC v The Chancellor Masters and Scholars of the University of Cambridge (Case C-316/18) (3 July 2019) the CJEU found that in raising and collecting donations and endowments the university was not acting as a taxable person.

The University of Cambridge in addition to its principal activity of providing exempt educational services makes taxable supplies including commercial research and the sale of publications. It recovers input tax under a partial exemption special method. The activities of the university are financed in part through donations and endowments which are placed into a fund and then invested. The fund is managed by a third party.

The issue was whether input tax incurred on the fund management fees was deductible. This depended on whether it was possible to make the necessary link between those costs and the downstream...