Just got off the phone to a new client. She's a consultant and some of her clients are colleges and sixth form centres. She's due to exceed the VAT threshold within the next 6 months and wants to get on top of her book-keeping, hence contacting me.
She's under the impression that the work she does for the colleges will be exempt from VAT. Is this correct, as I can't see why as it's still consultancy?
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Stuart
Birmingham City FC - Blues is my religion St Andrews is my church
Think that she's under the wrong impression Stuart.
I'm with you. it's a consultancy service and VAT is chargeable.
Any idea what gave her the impression that she was exempt?
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
Her understanding was that if the consultancy services related to higher or further education the work would not be vatable. I didn't agree but said I'd investigate further.
Had a scout round the net and HMRC site and can't find any exceptions to this.
Will give her the good news in the morning
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Stuart
Birmingham City FC - Blues is my religion St Andrews is my church
A couple of years ago, the company I worked for invoiced a hopsital and because it was educational it was not vatable. I remembered at the time queryiing it but they had paperwork to back it up and we never charged them vat. Can't remember what the rules were now as it was a long time ago.
One of my clients asked me a similar question a while ago. She has a beauty training business and gets funding from the local college and adult education. She has funded students 16-19 and over 19's part funded and adult paying learners. She said that someone had told her she should be exempt from VAT as she was dealing in education and asked me to look into it.
Found this in VAT Notice 701/30 which deals with Education and vocational training -
2.3 Is a supply being made?
If education is provided for any form of payment then that will be a supply for VAT purposes. If no payment is received it will be outside the scope of VAT
I would say that as a consultant, she is vatable. But worth ringing to check.
I spoke to HMRC today and the general gist was that it would be standard rated, unless the university or college were providing the training direct in which case it would be exempt.
I think this makes sense
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Stuart
Birmingham City FC - Blues is my religion St Andrews is my church
Sorry only just noticed this. Education provided by a school or college or by a company/person providing it through grant funding is exempt but any services provided to an educational establishment for money are standard rated. Therefore someone providing consultancy to a college would need to charge VAT as would anyone providing room hire.
