Is private tuition always exempt from VAT?

Is private tuition always exempt from VAT?

 

The supply of private tuition, in a subject ordinarily taught in a school or university, by an individual teacher acting independently of an employer, is exempt from VAT on a statutory basis. Over the years the Tribunals have considered the scope of the exemption. For example, on 28 January 2021 the Upper Tribunal released its decision that the VAT exemption did not apply to an individual teaching Ceroc dancing in dance classes.

 

Ceroc is a form of pairs dancing and is a fusion of jive and salsa. It was agreed that dance is a subject ordinarily taught in schools. The question was whether Ceroc, as a distinct style of dance, is commonly taught in schools or universities. The Tribunal decided that it was not.

 

The Tribunal commented that: Not only was there no evidence that Ceroc was commonly taught in schools, there was no evidence that pairs dancing was commonly taught in schools and there was no evidence that jive or salsa were commonly taught in schools.

 

The Tribunal made other comments that may also be of interest to self-employed teachers considering the scope of the VAT exemption for private tuition. For example:

 

  1. It is conceptually possible for a subject to be “taught” in schools but nevertheless to be purely recreational. After-school chess clubs or teacher-led games at playtime, for example, might involve some element of tuition, but not as part of the relevant curriculum.

 

  1. It is also conceptually possible for a subject which is commonly taught in schools on a basis that is not purely recreational to be the subject of private tuition in a way which is purely recreational. An example would be a history quiz in which a quizmaster imparts knowledge to participants but purely for recreational purposes.

 

  1. A determination of whether an actual supply is purely recreational must be answered by reference to all the circumstances of that supply. The extent to which a supply comprises tuition (namely the transfer of skills or knowledge) is relevant but not determinative.

 

A further point to be aware of is that HM Revenue & Customs explained in the 8 April 2020 edition of VAT Manual VATEDU40200 that: Instruction and coaching in sporting and recreational activities qualify as exempt private tuition, provided that the supply meets all the other necessary conditions.

 

The above points illustrate that when it comes to VAT, the correct answer is determined by the specific facts.

 

To find out more about how Garbutt & Elliott LLP can help you navigate the complexities of VAT please contact our VAT & Customs Duties Manager, Naveen Sahney on support@garbutt-elliott.co.uk