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HMRC internal manual

VAT Education Manual

Group 6 Item 5 Vocational training: scope of the exemption for government-approved vocational training

The exemption covers supplies of:

  • vocational training, including work experience; and
  • any goods and services you supply directly to trainees that are essential to the training

but only to the extent that they are ultimately funded by the Government as detailed here in VATEDU55000.

If your trader is an eligible body (see VATEDU39000), all its supplies of vocational training are exempt regardless of how they are funded.

The exemption does not cover:

  • counselling and careers guidance services (unless they are a compulsory or integral part of a vocational training package);
  • accreditation or assessment services - but these might qualify for exemption as examination services (see VATEDU45000); or
  • relief from direct taxes for vocational training (where the value of the supply for VAT purposes is the gross fee for the course - that is, the direct tax refund is part of the consideration).

The schemes benefiting from the exemption are mainly vocational training schemes that provide vocational training to young or unemployed people. They are approved by:

  • the Department for Education (DfE);
  • Jobcentre Plus (part of the Department for Work and Pensions) - previously the Employment Service;
  • Government Offices for the regions; and
  • their national counterparts in Wales, Scotland and Northern Ireland.

These schemes are administered and funded by:

  • the Young People’s Learning Agency (YPLA) and the Skills Funding Agency (SFA) - see also VATEDU58500;
  • the National Council for Education and Training for Wales;
  • Skills Development Scotland; and
  • the Training and Employment Agency in Northern Ireland.

These forms of training also qualify as Government-approved:

  • Approved schemes that are paid for using funds derived from the European Social Fund (ESF);
  • training administered by further education colleges and funded by any of the bodies listed above;
  • training for workplace assessors in connection with National Vocational Qualifications (NVQs); and
  • training aimed at providing additional skills for use in the workplace (for example, to Health and Safety and First Aid Officers).