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HMRC internal manual

VAT Education Manual

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HM Revenue & Customs
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Group 6 Item 4 Closely related supplies: school photographs

Possible contractual arrangements

A school photographer may supply photos either:

  1. direct to the pupils; or
  2. to the school or local authority (LA).

In the first case, the school or LA makes a separate supply of the use of premises, facilities and other services to the photographer in return for the commission or discount paid to him or her.

In the second case, the school or LA sells the photos on to the pupils.

School photos supplied direct to pupils

The photographer must account for VAT on the final selling price of the photos - that is the price the pupils have to pay. The VAT treatment of the commission or discount he or she pays to the school depends on whether the school is independent or LA-maintained.

If it is LA-maintained, VAT treatment also depends on:

  • what type of school it is;
  • whether it is registered for VAT; and
  • whether it acts for the local authority or the governing body in supplying the photographer with the use of its premises and facilities.

Supplies of photos direct to pupils of local authority schools: treatment of the commission or discount

VAT treatment will depend on the type of school and the position of the head teacher.

Type of school If then… Comment
community and voluntary controlled schools in England and Wales;      

public schools in Scotland;

controlled schools in Northern Ireland the school (normally in the person of the head teacher) acts as agent of the LA when it contracts with the photographer the LA must account for VAT on the commission or discount the school receives. It follows that, in order to decide the correct VAT treatment of the commission or discount that the photographer gives to one of these types of school, for every contract he or she must first confirm whether the head teacher is acting for the local authority or the governors.
  the school (normally in the person of the head teacher) has full control over the funding it receives from non-LA sources and acts as agent of the governors the governing body (if registered) must account for VAT on its supply to the photographer of the use of the premises and facilities.  
  foundation and voluntary aided schools in England;    

self-governing schools in Scotland;

voluntary maintained, voluntary grammar and grant-maintained integrated schools in Northern Ireland - the taxable turnover of the school, including the income it receives from the photographer, exceeds the VAT registration threshold; or
  • the school has registered voluntarily for VAT the school must account for output tax on its supply to the photographer of the use of premises and facilities. In these cases, the head teacher is employed by the governors of the school and acts as such on their behalf.

Supplies of photos direct to pupils of independent schools: treatment of the commission or discount

Depending on whether it is registered for VAT, the school must charge the photographer VAT on its supply of the use of premises and facilities. The consideration for this supply is the commission or discount that the photographer has given to it.

Supplies of photos to the school or local authority for onward sale to the pupils

The photographer must account for VAT on the price actually charged. It then follows that:

If… then…
the local authority, school, governing body or parent-teacher association with which the photographer contracts is registered for VAT it can recover the VAT as input tax, subject to the normal rules, and must account for VAT on the full value of the supply to pupils etc.
the body with which the photographer contracts is not registered for VAT current advice to the photographer is:
  1. call the National Telephone Advice Service; and
  2. pending their advice, account for VAT on the amount he or she has actually charged
 

 

We may subsequently issue a Notice of Direction requiring the photographer to account for VAT on the final selling price the unregistered body charges pupils. See V1-12 section 21 School photographers for further information.