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HMRC internal manual

VAT Education Manual

Group 6 Item 1 Education, research and vocational training provided by eligible bodies: what is education?: distance learning: general advice on distance learning courses

The liability of the supply will depend on what precisely is being supplied. It may be:

  • education that is supplied by an eligible body which is exempt from VAT under Schedule 9, Group 6, Items 1 and 3 of the VAT Act 1994;
  • education that is not supplied by an eligible body and therefore standard rated;
  • a single supply of printed matter, which is zero-rated under Schedule 8, Group 3, Item 1 of the VAT Act 1994; or
  • a multiple supply of goods and services with different VAT treatments, in which case an apportionment may be necessary. (The education element may be standard rated or exempt; goods may be zero rated and/or standard rated; and other services, for example website access facilities, are most likely to be standard rated.)

Note: CD ROMs, tapes and DVDs are liable to the standard rate of VAT and output tax will be due except when they are an ancillary or composite element of a single supply where the principal element or overall nature of the supply results in a different VAT treatment.

The nub of the matter is likely to be whether in providing a distance-learning course, the supplier provides education, or printed matter (or an electronic equivalent), or both. This will need to be determined by reference to the prospectus and course material, and you may find that the individual courses run by your trader will require different VAT treatment.

The tribunal decision of College of Estate Management on distance learning may also provide some assistance on the VAT treatment of distance learning.