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HMRC internal manual

VAT Education Manual

Group 6 Item 1 Education, research and vocational training provided by eligible bodies: eligible bodies: university subsidiary training companies

In some cases where a university trading company provides education, it may be acting as a ‘college, institution, school or hall of a university.’ As a consequence it is an ‘eligible body’ for the purposes of Note 1(b) Group 6 Schedule 9 of the VAT Act 1994. This means that any education or training provided by the university subsidiary trading company is an exempt supply of education.


As a result of developments in VAT case law and in the methods by which education is delivered by universities a review on the treatment of supplies by companies that are owned or controlled by a university was undertaken. This resulted in a change in policy that was announced in Revenue and Customs Brief 09/10 (link is external) and took effect from 11 March 2010 (the date of the Brief).


This treatment is limited to those companies that:

  • are owned/controlled by a university;
  • provide university level education leading to a qualification awarded by a university or a nationally recognised body; and
  • have close academic links with their parent university; for example, where students on the company’s courses are registered/enrolled with the parent university, subject to its rules and regulations and awarded qualifications by it.

Please see VAT Information Sheet 03/10 for further details.

Once a university subsidiary company is regarded as an eligible body within Note (1)(b):

  1. all supplies of education and vocational training provided by that company are exempt from VAT;
  2. any supplies which fall within Group 6 of Schedule 9 VATA 94 should be treated as an exempt supply, for example supplies of goods which are closely related to the supply of education under item 4.

Other supplies, in particular consultancy services, provided by a subsidiary company of a university remain subject to VAT at the standard rate.

The policy on any education or training provided by the university subsidiary trading companies will be reviewed in the light of the decision of the Supreme Court in SAE (see also VATEDU39370).