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HMRC internal manual

VAT Government and Public Bodies

Local authority education services: related activities: holiday clubs and supervised play facilities

Local authorities who charge for the provision of holiday clubs and supervised play facilities are undertaking a business activity. Under Group 7 of Schedule 9 to the VAT Act 1994 these supplies may be VAT exempt under one of two provisions that apply to the care or protection of children and young persons. If the supply does not fall within either of the exemptions it is standard-rated.

Firstly clubs or providers of children’s day care are supplying exempt care services if they are required to register under the appropriate social legislation, for example the Children Act 1989. Clubs are only required to register under this legislation if they provide a designated number of hours of care to children under the age of 8. Therefore exemption will only normally apply to services provided in respect of children below this age.

However, a club may, if it wishes, be permitted to exempt services provided to children over the age of 8, as long as the care provider is registered under the appropriate social legislation and:

  • also provides care to children who are younger than 8
  • operates identical hours of opening for all age groups, and
  • provides care and activities for the over 8s that are comparable with, and similar to, that provided to younger children.

Secondly, item 9, Group 7 exempts the supply of welfare services (including the protection of children and young persons) by a public body, otherwise than for profit.