After threats by Edinburgh University Students' Association (EUSA) to boycott Edinburgh First catering outlets across campus last week, the company is looking into suggestions proposed by EUSA to stop students being charged VAT.

EUSA proposed that Edinburgh First and the Edinburgh University accommodation services should set up a separate student-facing sister company which wouldn’t charge VAT. In this way their student market would be separated from the tax paying general public who use Edinburgh First facilities outside of the university year.

This is how EUSA operate when their sister company EUSAco cater for the festival going general public in August.

However, Richard Kinton of Edinburgh First appeared reticent when questioned by The Journal about the proposal. He said: “EUSA have given us a proposal and we will be looking into that. Obviously there are financial and tax implications which need to be looked at first by my colleagues.”

The HM Revenues and Customs (HMRC) states clearly that students need not be taxed on catering services by the university backed Accommodation Services: “Where an educational institution provides exempt education to its own pupils and students, then the supply of catering they make is also exempt provided any food and drink is supplied at or below cost by the school.”

Karel Thomas an executive officer of the British Universities Finance Directors Group, said that an examination of the total tax affairs of the University and the subsidiary company, taking into account the policies of HMRC as they affect universities, must be carried out.

She said: “The situation is complex and not just a question of taxable or tax exempt sales of food and services – for example, there are much wider issues involving the premises in which the services are delivered.”