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Where Taxpayers and Advisers Meet

VAT Rate for Private Tuition

darren123
Posts:1
Joined:Wed Mar 28, 2018 7:00 pm
VAT Rate for Private Tuition

Postby darren123 » Wed Mar 28, 2018 7:07 pm

I currently provide private tuition through a limited company, and am the sole director receiving basic salary/dividends.

I teach Maths and Economics which are classed as ordinarily taught subjects in schools.

My accountant has advised me that the tuition would not be vatable, "due to the nature of work" and as I am "a sole proprietor". He says that as a sole owner/operator of the limited business I would be classed as a sole proprietor, although I would have interpreted this as meaning a sole trader and hence not a limited company.

Could someone please give their opinion? I would hate to receive a large VAT bill in years to come for not properly accounting for VAT.

Thank you in advance.

greybags1
Posts:47
Joined:Tue Jan 31, 2017 10:41 am
Location:NE Scotland

Re: VAT Rate for Private Tuition

Postby greybags1 » Thu Mar 29, 2018 3:18 pm

As I understand matters the law states that the supply of private tuition is an exempt supply provided it is in a subject ordinarily taught in a school or university and given by an individual teacher acting independently of an employer [VATA 1994, Sch 9 Group 6 Item 2] which is confirmed in the tribunal decision in C & E Clarke; A & H Clarke (VTD 15201) (TVC 21.51) where HMRC accept that private tuition is exempt when supplied by a sole proprietor, a partnership or any member of a partnership. However, because of the wording of the legislation it appears the exemption does not extend to instruction delivered by anyone employed (even if the teacher concerned is the sole shareholder of a company) and is restricted to tuition provided by a teacher acting in an individual or personal capacity (see HMRC v Empowerment Enterprises Ltd, CS [2006] CSIH 46 (TVC 22.342)).


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