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Where Taxpayers and Advisers Meet

Vat on private tuition (via ltd company)

Sam1234
Posts:1
Joined:Tue Jan 31, 2017 12:31 pm
Vat on private tuition (via ltd company)

Postby Sam1234 » Tue Jan 31, 2017 12:40 pm

Hi All,
Thanks in advance for your help. I am director and employee (take salary) of Limited company. I provide private tuition for Maths and English (i.e. subjects commonly taught in school). I am not sure if my company should charge VAT from parents.

The HMRC link is
https://www.gov.uk/government/publicati ... l-training

It says that
If the teacher is …a sole proprietor or member of a partnership the subject is one taught regularly in a number of schools or universities
And … the subject is one taught regularly in a number of schools or universities
Then …it is an exempt supply of private tuition

Mine is a limited company not a sole trader or member of a partnership.

Also does it mean that one has to pay 20% VAT followed by 20% Corporation tax followed by Income tax (approx. 35%).

GlobalTaxAdviser
Posts:633
Joined:Fri Dec 05, 2014 1:18 am

Re: Vat on private tuition (via ltd company)

Postby GlobalTaxAdviser » Tue Jan 31, 2017 3:36 pm

Hi

I think you maybe better off acting as a sole trader than Limited company. You will need to register for VAT if revenue is greater than 83K

Charging VAT will become a cost to the parents so may hit demand

VAT is charged to clients and then paid to HMRC

Corporation Tax is payable on the profits ( income less costs ) excluding any VAT

After Corporation tax is accounted for then dividends is payable at tax rates dependent on the amount taken out. You can take a small Salary as well which will save you Corporation Tax.

Kind Regards

GTA


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