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HMRC internal manual

VAT Construction

HM Revenue & Customs
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‘Relevant residential purpose’ - interpretation of terms: category (d) - residential accommodation for students or school pupils: what is a ‘student’?

Note (4)(d) includes, as a category of relevant residential purpose building, ‘‘residential accommodation for students or school pupils’. Whereas the term ‘school pupil’ is one that is reasonably clear and uncontroversial, the term ‘student’ is less so and requires further clarification to assist in the determination of whether a building is intended for use for a relevant residential purpose for the purpose of obtaining VAT relief. For the avoidance of any doubt, VAT relief on the construction of residential accommodation for school pupils who are boarders will be subject to the same rules that apply to residential accommodation constructed for students.

The term ‘student’ in this context refers to a person undertaking a course of educational study or instruction. It covers any person who is receiving education or vocational training from a university (or a centrally funded higher education institution or a further education institution) or from any other supplier who is providing similar, or the same type of, education or vocational training to a similar, or the same, academic standard.

Examples include (but are not necessarily limited to) individuals who have left school and are undertaking higher or further education or training with a view to:

  1. obtaining a generally recognised academic or professional qualification
  2. maintaining an existing professional qualification for which accreditation is received
  3. undertaking a course of study which, whilst not leading to a recognised qualification, has a high level of academic content and is intended to improve the knowledge and understanding of the student in an area of academic interest

The maintenance of existing professional qualifications would include Continuing Professional Development (CPD) applicable in cases where either:

  • a professional body requires from its members the continuing recognition of a qualification
  • an employer requires employees to maintain or improve relevant technical skills

Whilst it should be clear when an activity falls within the scope of one of the first two categories (as numbered above) it may be less clear when an activity falls within the scope of the third category. The following are examples which are intended to illustrate the kind of educational activity which is included:

  • summer schools in which international students and others have the opportunity to undertake a programme of study comparable with the work done by full time students
  • residential events the purpose of which is to show aspiring university applicants what it is like to study at university - whilst the academic content is high and the participants are school pupils, the purpose of their attendance is not either part of their A-level curriculum nor is it part of a programme which leads to a qualification
  • English as a Foreign Language (EFL) courses (see paragraph 9.1 of Notice 701/30)
  • academic conferences which offer development and ongoing learning to the academic staff of universities and colleges to ensure that academics are able to share ideas, learn from each other and embed the latest thinking into their own research and teaching

People who attend classes, often badged as ‘summer schools’, which may offer a life-enhancing experience and promote greater cultural or spiritual awareness but the subject matter of which falls into the category of hobbies or leisure interests (for example pottery workshops, art or literature appreciation courses etc.) as opposed to receiving educational or vocational training to an academic standard, will not qualify as ‘students’.

Whilst persons engaging in theological studies in order to become a minister of faith (such as a priest, rabbi or imam) will qualify as ‘students’, those attending seminaries or religious retreats which do not serve this purpose but are intended primarily to foster or reinforce faith, are not considered to be receiving educational or vocational training to an academic standard and will not qualify as ‘students’.