The Conditions of Exempt Education Services

In the case if Simon Newell vs HMRC, the appellant provided tuition in motocross riding and motorcycle maintenance to young people over the age of 4 which was treated as falling under the scope of exemption from VAT on the basis of it being a supply of private tuition.

 

Mr Newell had been providing tuition on this topic for many years and was considered to possess a high level of knowledge on the subject. However, HMRC disagreed that the sessions taught satisfied the conditions for exemption. These conditions state that the supply of private tuition is only an exempt supply if the subject being taught is done so “ordinarily in a school or university” and is provided by “an individual teacher acting independently of an employer”.

 

Whilst Mr Newell as an individual qualified for exemption, HMRC contended that the subject itself did not satisfy the criteria necessary for Mr Newell to exempt his supplies from VAT. Despite the fact that related subjects were taught at GCSE level, the respective syllabuses were adjudged not to be similar to a satisfactory degree. The First-Tier Tribunal landed on the side of HMRC and agreed that Mr Newell’s educational sessions did not meet the criteria for exemption.

 

If you provide any form of education services, you need to be aware of the conditions that need to be satisfied to allow for these services to be exempt from VAT and prevent being assessed by HMRC for incorrect VAT treatment of a supply. Please call one of our consultants on our free helpline to talk through your issues.

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