Private tuition – VAT exemption
I think the Upper Tier Tribunal has considered the first Appeal under Item 2 of the education exemption. This was in the case of Anna Cook T/A Ceroc Dancing. This concerned the exemption for private tuition. (The provisions are slightly different to supplies of ‘education,’ although it is part of the same exempt Group.)
The Tribunal followed the First Tier definition of private tuition in Hocking:
“The requirement is, first, that the subject or activity should be one that is commonly taught in schools or universities, and not one that is purely recreational; it must be part of school or university education. Secondly, the supply must be one of tuition in that subject or activity, in the sense of a transfer of knowledge or skills.”
The question before both the FTT and Upper Tier was:
“Were the supplies of Ceroc dancing classes made by Ms Cook during the relevant period exempt because they were supplies of private tuition in dance, being a subject commonly taught in a school or university, or were they supplies of private tuition in a form or style of dance, namely Ceroc, which is not so taught?” (see para 30)
Paras 31-32 summarise why the Upper Tier considered why the FTT had reached the wrong conclusion. Although the FTT had asked itself the correct question, it had erred in answering that question.
Put simply it is not disputed that dance is ordinarily taught in schools or universities. But Ceroc dancing, being a distinct form or type of dance, is not ordinarily taught. This is the significant issue where the FTT went wrong.
The Upper Tier looked at the main FTT decisions (para 17) but held that they largely turned on their individual facts. There is overlap with the cases referenced in HMRC guidance in VATEDU40300. Some decisions consider the test of ‘comparability.’ This is whether the content of the privately taught tuition is comparable to that taught in schools or universities. The question of para 30 (above) is a slightly different matter.
The correct question is therefore one of ‘subject,’ not ‘content,’ although in practice the two questions do overlap.
The case is certainly worth a read for persons involved in delivering private tuition. Although it is helpful, Cook does not provide a simple template for use by other tuition providers.
The decision is here: www.bailii.org/uk/cases/UKUT/TCC/2021/15.html
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I have over 30 years experience in VAT, and am currently also a part-time member of the Tax Tribunals.