I have been approached by someone who set up a Ltd company in January, supplying private tutoring to children who have special education needs. The tutoring is supporting the work they do at school.
He is concerned as to his VAT status - not near threshold at present, but wants to know what his position is before he gets there. I have had a good rummage through VAT Notice 701/30 and also VATA 1994 Sch 9 Group 6, and my current understanding is that as a limited company, his private tutoring is a standard rate supply. However, if he were a sole trader (or a partner in a partnership) this may not be the case and his supply may be exempt (VATA 1994 Sch 9 Grp 6 Item 2 and section 6.1 of VAT Notice), although if he then were to employ anyone else, their supply would be standard rate.
But, this seems to hinge on whether he is tutoring in a subject ordinarily taught in a school or university. As his tutoring is supporting the children's schoolwork, my feeling is that it is subjects ordinarily taught in school - although presumably it would be up to him to prove that in the case of an inspection.
Interested to know if my thoughts concur with anyone else, or if I'm missing something in my thought process
Exactly right, Helen.
It is annoying that education can be exempt when provided via an individual, but not a limited company, when the actual delivery is identical. Another possibility is to bring the company within the 'eligible body' definition, but this requires non-profit status, which may not be attractive to the client,
