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VAT liability as private tutor

VAT liability as private tutor

I have been approached by a potential new client who is a private tutor - teaching Spanish & piano (a strange combination and not at the same time I don't think)

I'm trying to figure out whether their supplies would be exempt from VAT.

He also acts as an agent for similar tutors - the client gets in touch with him, he then sends out a tutor. The client pays the tutor directly giving with the tutor giving him a commission from this.

Any advice greatly appreciated!


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21st Dec 2011 16:32

personal lessons

Normally the VAT exempt status - Schedule 9 Group 6 item 2 - depends on whether the lessons are independent of an employer.  So if this person is a sole trader or partner in a partnership, lessons taught personally by him are exempt in my view.  If he is trading via a limited company, technically he is an employee of the company hence not VAT exempt.

If the client is paying one of the tutors directly for lessons given personally by that person, in my reading of Schedule 9 Group 6 that is also exempt for the same reason, providing all tutors are trading as sole traders or partnerships.

The commissions paid are standard rated.



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21st Dec 2011 16:43

one other thing

It's also worth noting that these sort of arrangements can be challenged for "false self-employment" so care should be taking in the working arrangements to avoid this.  There is a crackdown on dance tutors in particular around here.  But - typical HMRC! - the one client of mine they picked on has 23 tutors, all PAYE, and paid over £17k in PAYE and NI in tax year 2010-11!

"Oh did they?" she said when I told her this by phone.  "We'll get back to you."  Two days later they cancelled the planned two-person round trip from Preston (100 miles away), I felt like asking them for a commission on the costs I'd saved HMRC.

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