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HMRC internal manual

VAT Education Manual

From
HM Revenue & Customs
Updated
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Group 6 Item 4 Closely related supplies: goods and services sold to the pupils etc of other eligible bodies

The following table will help you to decide if the business should charge VAT on closely related goods and services it sells to the pupils, students and trainees of other eligible bodies when it is not supplying education to them.

### If the supply is made by… ### then it…
   
an educational institution such as a school, college or university which are eligible body (see VATEDU39000) may not charge VAT on the closely related goods and services it provides direct to the pupils, students and trainees of other schools, colleges or universities that are also eligible bodies.
an eligible body other than a school, college or university (see VATEDU39000) should charge VAT on the closely related goods and services it provides unless relief is available elsewhere.

The following table gives further examples. Where no VAT is chargeable, the liability of the supply will follow the liability of the principal related supply and be either exempt or outside the scope.

### If the supply is made by… ### and it… ### then it…
     
a school shares a catering outlet with another educational institution that is also an eligible body  may not charge VAT on the meals it provides direct to the pupils or students of that institution.
a university contracts to provide conference facilities to another eligible body rather than direct to its students should charge VAT unless the recipient body is going to use the facilities in connection with an exempt supply of education etc - see VATEDU25000.
an eligible body (see VATEDU39000) supplies closely related goods and services to a local authority maintained school (see VATEDU65000) should charge VAT because the school does not supply education but provides it for no charge - see VATEDU25000.
an eligible body  supplies catering and accommodation to a charity which uses them in connection with free training for its employees should charge VAT because the charity is not supplying the training.

If you are still not certain whether your trader, which is an eligible body, should charge VAT, follow the procedure set out in the decision chart below.

### Step ### Decision
   
1 Are its supplies direct to pupils or students of an educational institution (school, college, university) or local authority (LA)?
  • If yes, go to step 2.
  • If no, go to step 3.     
      2 Is it an educational institution or local authority?
  • If yes, its supplies are not liable to VAT.
  • If no, its supplies are standard-rated.     
      3 Are its supplies to a body supplying education by way of business (charging fees - see VATEDU25000)?
  • If yes, its supplies are not liable to VAT.
  • If no, its supplies are standard-rated.