A judgement from the Court of Appeal made on the 21st of December 2001 could have very serious consequences for the way that Imperial College Union operates. Lord Justice Peter Gibson, Lady Justice Arden and Mr Justice Morland rejected an appeal by the University of Leicester Students Union against a previous decision in favour of Customs and Excise that the union should be required to charge VAT on sales of soft drinks to students.

The basis of the Leicester Union's appeal was that the Union was an integral part of the university, and thus covered by the university's charitable status - a view shared by all student unions across the country. This appeal was rejected by the court, which concluded that the Union and the university were in fact separate organisations.

Unlike universities, which can register as charities because of their status as educational institutions, students unions do not fulfil any of the possible criteria for charitable status. Losing charitable status would affect not just VAT exemptions but a variety of other taxes as well - including Corporation Tax. This could lead to clubs and societies being required to pay Corporation Tax on the profit they make from events. When asked about the situation, ICU President Sen Ganesh said "this could be a big problem."

In his judgement, Mr Justice Morland said that "I had hoped that it would have been possible for the appeal to be allowed. Student Unions undertake a very important and worthwhile role in furthering the interests of students and the effectiveness of their University education." However, Imperial College Union may have a 'get-out' clause in the College's Royal Charter which explicitly states that the union should be treated solely as an integral part of the university (something that is hammered into those victims unlucky enough to be exposed to an ICU officer training course).

The Court ruling might very well take precedence over the Royal Charter, but, as one senior ICU figure said: "we are planning to lie low and see what happens."