Building an education agency that uses a simplified agency model such that each foreign client makes a single payment to the agency and the agency then passes over 90% of all funds received to cover transportation, insurance, accommodation and educational course fees.
Do the educational course fees form part of taxable turnover or not?
Example: Shool charges £2,000, agency charges client £2,500 (to cover: £2,000 course fee, £80 airport transfers, £50 insurance, £200 visa fee, £70 local weekend trips, Agency markup, aka profit £100)
In thexample above, if the entire fee is taxable turnover then VAT threshold is hit on 35th student.and agency makes £3,500 (less expenses). However, if the £2,000 course fee is zero rated then 170 students can be supported before hitting the VAT threshold for a profit of £17,000 (lless expenses)