Exeter Guild landed with £283k bill for not paying taxes on food served in The Ram
They believed food to be exempt from VAT
The University of Exeter's students' guild has been landed with a £283,000 bill for unpaid VAT on food sold in The Ram.
Following a review by HMRC, the guild was told it owed £269,000 of unpaid taxes, with an additional £14,000 in interest.
The guild has contested the bill after claiming that a letter sent by HMRC in 2003 suggested that food sold in The Ram was exempt from VAT. They said HMRC argued the letter "can be interpreted differently."
The guild have put forward a hardship request, meaning the case will be heard by a tribunal.
HMRC have declined to comment on individual cases or ongoing investigations.
Richard Wild, of the Chartered Institute of Taxation, said HMRC would "typically request" that a taxpayer adopted the correct VAT payments from a current or future date.
He added: "Any retrospective action by HMRC should be exceptional, and restricted to cases where the terms of its policy are not met."
An annual report by the guild showed a ten per cent decrease in sales last year, falling to £2.5m.
In its 2017-18 report, the guild said: "Trading has been particularly challenging in our licensed venues as both our bar and nightclub have seen significantly reduced numbers of attendees throughout the year."
They added that they expect to see an improvement in the figures in the 2018-19 report, with The Lemmy having made a come back this year.