Shaun, the key is that the subject is similar to one delivered in a school. The online link indicates that the 'vast majority' of subjects would fall within this definition. There is no case law that I know of that excludes cookery. Indeed, schools frequently teach cookery. The fact that there is no formal examination at the end is not relevant, nor the fact that the age of recipients means that the tuition is delivered in a different format.
One slight difference is that VAT exemption does not extend to 'closely related goods and services.' This means that, if the students eat the food, there is a separate supply which is outside the exemption. Where, for example, schools deliver cookery/domestic science, and the pupils eat the food, it is covered by the exemption.
(don't you just love VAT?)
-- Edited by leshoward on Tuesday 8th of January 2013 04:21:55 PM
But the business is not the cooking but rather the teaching which would be standard rated for VAT purposes.
The food side is purely incidental to the main business rather than a business in itself.
kind regards,
Shaun.
__________________
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.
I am not sure I agree! If cookery is a 'subject ordinarily taught in a school,' and if the tuition is delivered by an individual or member of a partnership, then the exemption for private tuition would apply. Notice 701-50, chapter 5 explains further. See this link http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal?_nfpb=true&_pageLabel=pageLibrary_PublicNoticesAndInfoSheets&propertyType=document&columns=1&id=HMCE_CL_000117
So that would suggest that if you teach someone yourself a subject as it is taught in school or university, to the level it is taught in school or university, then it is exempt but if you hire someone else to teach the course it is standard rated.
VAT notice http://www.hmrc.gov.uk/manuals/vatedumanual/VATEDU40200.htm does however contain the proviso that the course should be similar (although not necessarily the same) to that taught in schools and universities. Does that not then imply that the course should be a couple of years long with an exam at the end of it?
Also the line about the recipients of the course being an indicator as to whether the course is the same as that taught in schools and universities would indicate that (using extreme examples) a cake baking course for retired people would be treated completely differently to an adult education GCSE domestic science.
The key line in 40200 seems to be that if there is any doubt as to whether the course is as it would have been taught in school then the onus is on the people organising the course to provide the evidence to support their claim to exemption.
I love these tax / VAT debates. Where's Bill and Tim? They're missing out on a potentially good one here.
kind regards,
Shaun.
__________________
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.
One of my clients is in business as a Limited Company providing training and education in Beauty Therapies, City & Guilds courses etc. and has students of differing ages from 16 up to adult. Some of the students are fully funded by government, some part funded and others (mainly adults) have to pay for their courses. I have looked into this as someone told my client that she should not be charging VAT as she was providing educational services.
In Notice 701/30 Point 2 says "Is someone in business for VAT purposes?" I took this to mean that if any payment is received for the educational services, then someone is in business to make a profit and should be charging VAT at the standard rate. But I think this may apply to Limited Companies not sole traders/partnerships as this seems to conflict with Point 6 about private tuition.
VAT exemption applies where either the organisation delivering the training is en 'eligible body,' which excludes a private limited company, or where the training is funded by the LSC, Learning and Skills Counsel. Notice 701/31, chapter 5 gives more information. Do re-post or PM for more clarification.
Many thanks Les. My client is very definitely a private limited company, providing training in order to make a profit, so her training is definitely within the scope of VAT.
