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HMRC internal manual

VAT Education Manual

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Group 6 Item 2 Private tuition and tutorial colleges: exclusions from the private tuition exemption

The following are excluded from the exemption.

  • Supplies of tuition carried out by employees.
  • Supplies by schools to pupils where an individual tutor has made the supply of tuition to the school. The onward supply is made by the school, not the tutor.

Colin Beckley

In the Tribunal case of Colin Beckley (LON/05/0389) the Appellant claimed that his tuition in transcendental meditation fell within the exemption for private tuition. The decision of the Tribunal supports our views that to fall within the exemption:

  • the tuition must be in a subject ordinarily taught in a UK school;
  • the subject should be part of a course of study and not just an activity that is practised in schools or universities.

The Chairman commented that, It has features of a ‘recreational’ activity in the most respectful sense of that word; but it lacks the degree of formality or structure, regarded as significant in [the case of] North of England Zoological Society, to bring it within the definition of school or university education.

W Haderer

The case of W Haderer v Finanzamt Wilmersdorf (c-445/05 [2008] STC2171) involved a German freelance tutor who provided assistance with schoolwork at an adult education institute and ran ceramics and pottery courses at another adult education institute. The tax authority issued a ruling that Haderer’s services were liable to VAT. He appealed, contending that they should be treated as exempt.

The case was referred to the ECJ, which held that the activities of an individual acting in a freelance capacity, consisting of providing assistance with schoolwork and also running ceramics and pottery courses in adult education centres, can be exempted from value added tax under Article 13A(1)(j) … only where such activities consist of tuition given by a teacher on his own account and at his own risk, and covering school or university education.

Marcus Webb

Marcus Webb Golf Professional (TC00323) concerned a three-way partnership: a golf professional, his wife, and their related limited company. HMRC accepted that golfing tuition supplied by the golf professional as a partner was exempt (as golf lessons could be included under the definition of ‘a subject ordinarily taught in a school or university’) but said that tuition supplied by him as director of the limited company was standard-rated. HMRC also said that tuition supplied by a partnership employee was standard-rated. The Appellant appealed the ruling on the grounds that it violated the principle of fiscal neutrality.

However, the Tribunal ruled that as neither the golf professional nor the employee was a body covered by public law with education as its aim, the only exemption possibly available was tuition given privately by a teacher, covering school or university education. The term ‘privately’ was defined by the ECJ in Haderer (later supported by the Court of Session in Empowerment Enterprises) as requiring the teacher to provide the tuition on his own account and at his own risk, something an employee would not do. The term acting independently of an employer in the UK exemption reflects that definition of ‘privately’. The Directive had been correctly transposed and there was no claim. The principle of fiscal neutrality was overridden by the terms of the VAT Directive, which envisaged different liabilities applying to the same supply of tuition, depending on the status of the supplier.

Eulitz

In an ECJ case Eulitz (C-473-08), Eulitz was a partner in the company Eulitz GbR and a free lance teacher who provided courses about fire prevention for post-graduates at a German university. The partnership appealed against a ruling by the tax authority that the income it received could not be exempted.

The ECJ held, on its interpretation of Article 13A1(j) of the EC Sixth Directive, that the lectures which E gave could qualify as tuition, but that, in circumstances such as those at issue in the main proceedings, a person such as Eulitz, a partner in the claimant in the main proceedings, who performs teaching work for training courses offered by another body, cannot be regarded as having given tuition ‘privately’ within the meaning of that provision. In the term ‘tuition given privately’, ‘privately’ is not the same as ‘independently’.

Audrey Cheruvier t/a Fleur Estelle Belly Dance School

In the Tribunal case of Audrey Cheruvier (TC03148) the appellant claimed that her tuition in belly dancing fell within the exemption for private tuition because belly dancing was a form of dance. The Tribunal found for HMRC and decided that the appellant was only teaching one form of dance and what was been taught is not the same as in a school or university.

Stuart Tranter t/a Dynamic Yoga

The case of Stuart Tranter (UKFTT 959) considered whether the yoga tuition given by the appellant fell within the exemption for private tuition. The Tribunal found that the yoga taught by the appellant was overwhelmingly recreational in nature rather than educational. In any event the Tribunal decided that yoga was not a subject ordinarily taught in schools or universities.

Christine Joy Hocking 

The Tribunal case of Christine Joy Hocking (UKFTT1034) considered whether the teaching of Pilates by the appellant was educational in nature and if so whether it was a subject ordinarily taught in schools or universities. The Tribunal gave a useful summary of the points to considered and stated that 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.

In this case the Tribunal decided that the teaching of Pilates was educational but what is being taught is not considered to be school or university education.