Is VAT chargeable on degree courses
A private college offers courses both in house and degrees in co-ordination with universities. The in house ones are vatable - the question is are the ones run with the universities ?
There are two types of course
1. validated by the university - the college runs the course but the degree is awareded by the university in the name of the university
2. accredited by the university - the college runs the course and awards it in its own name but students get credits agaisnt modules when they go onto a university course
Any help ?
Case History
Thank you - that is a comprehensive reply.
It is clear they are not an eligible body and they certainly do charge VAT on the courses where they are not connected with the university.
I have however heard of one case - School of Finance & Management - where it was upheld the college was in essense of college of the university for the purpose of teaching and awarding degrees in the name of the university
The precise contractural wording is going to be at test here I know - but do you know of this case and whether it is relevant to our situation
The lesson for today?
The law on this is under Group 6 of Schedule 9 to the VAT Act, and it only exempts 6 items:
1) "The provision by an eligible body of— (a) education; (b) research, where supplied to an eligible body; or (c) vocational training."
As there's VAT charged on other courses then I assume that the college is not an eligible body - So no luck under this one.
2 "The supply of private tuition... by an individual teacher acting independently of an employer". - Again no luck here.
3 "The provision of examination service... (a) by or to an eligible body (b) to a person receiving education or vocational training which is— (i) exempt by virtue of items 1, 2 or 5" - We'll see how number 5 goes, but no luck under items 1 or 2
4 "The supply of any goods or services which are closely related to ..item 1" - You're not exempt under 1 so no luck here.
5 The provision of vocational training to the extent that the consideration payable is ultimately a charge to funds provided .. under section 2 of the Employment and Training Act 1973." - Since this appears to be a normal degree type course then I'm assuming no luck here.
6 "The provision of facilities by ...a youth club" - Again no luck here
Your supplies don't appear to be exempt under any of the above, so that leaves the default of standard rated. It may be that the university will be able to exempt it's examination services which can then be passed on to the student as a disbursement, or it may make an exempt supply direct to the student, but it looks like the actual courses will be taxable.
Obviously I haven't looked at any of the agreements between the college and the university, or seen how the courses will work in practice, but it looks like the college will be the one providing the actual education, and that this is likely to be standard rate.