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HMRC internal manual

VAT Education Manual

Is a business making supplies for consideration?: types of body providing education

The type of body providing the education will usually help you to determine whether business supplies are being made.


The following establishments normally provide education in return for fees and thus by way of business:

  • independent fee-paying schools, including non-maintained special schools;
  • universities; and
  • institutions teaching English as a foreign language

Establishments which do not normally charge for the education they provide

The following establishments do not normally charge for the education they provide. It is usually funded by local or central government grant and is therefore a non-business activity.

  • community schools;
  • foundation schools;
  • voluntary aided schools, including former special agreement schools;
  • voluntary controlled schools;
  • community special schools;
  • foundation special schools;
  • grant maintained (integrated) schools (Northern Ireland);
  • self-governing schools (Scotland);
  • city technology colleges; and
  • academies.

These schools sometimes charge for some additional tuition - for example music or sports instruction. Such tuition is not a business activity where it is provided to pupils under a statutory framework. See also VATEDU39200.

Institutions that may require payment for the education they provide

Institutions that may sometimes require payment for the education they provide include:

  • sixth form colleges;
  • tertiary colleges; and
  • colleges of further education (FE).

These institutions normally provide education for no charge to students who are 19 years or under at the start of their courses (18 years or under in Scotland). These courses are non-business.

They normally charge for education to students over that age and to foreign nationals. These courses are business.

Some further education colleges now provide free further education courses for 19-25-year-olds. Many further education colleges now provide higher education courses for which fees are charged.

The important factor is whether a fee is charged - not the age of the students.

{#}Organisations not specifically mentioned

The guidance given in VATEDU26000, VATEDU26500VATEDU27000 and VATEDU27500 will help you to decide whether the particular organisation is making supplies of education in the course or furtherance of business.

{#}Other business activities

Even though the education they provide might not be a business activity, any educational institution may still be in business if, for example, it:

  • regularly lets property; or
  • hires out its facilities for wider community use.