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HMRC internal manual

VAT Education Manual

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HM Revenue & Customs
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Group 6 Item 3 Examination services services including school inspections: international services

Place of supply

For the purpose of determining where a supply of examination services takes place, the rules relating to consultancy services are applied. This means that the service falls within item 2 of Schedule 5 of the VAT Act 1994. Detailed guidance can be found in VATPOSS. Broadly this means that where the supply of examination services is received by a person belonging outside the EU or a person who belongs in another member state of the EU who applies the service for the purpose of a business carried on by him, the supply will be outside the scope of UK VAT. A supply of examination services to a person who belongs in another member state of the EU who does not apply the services to a business takes place in the UK and the normal VAT rules apply.

Right to recover input tax

Whilst the rules relating to consultancy services are followed to establish the place of supply, the nature of the services does not, of course, change from examination services. The right to recover input tax will depend on whether the supply of examination services would have been taxable if it had taken place in the UK.

If the supplier is an eligible body as defined by Note (1) to Group 6 (See VATEDU39100) then its supply of examination services would have been exempt if made in the UK and no VAT may be recovered relating to this supply.

If the supplier is not an eligible body then VAT incurred in the UK relating to the supply is deductible if:

  • the customer is not an eligible body (See VATEDU39100); and
  • the customer is not a person receiving education in the UK which is exempt; and
  • the customer is not a person receiving education or vocational training which is provided other than in the course or furtherance of a business.

Education which takes place outside the EU is not considered to fall within the third point above, i.e. non-business. This is an EU concept that cannot be assumed to have an equivalent meaning outside the EU. Therefore supplies of examination services made by eligible bodies which take place outside the EU would only have been exempt when made in the UK if the customer is also an eligible body.