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HMRC internal manual

VAT Place of Supply of Services

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HM Revenue & Customs
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Where performed services: education services

Prior to 1 January 2010 both B2B and B2C were taxable where performed.

From 1 January 2011 educational services fall under the general rule B2B and are taxable where carried out B2C. However, where a payment is made by a business customer that gives the right to attend an event of an educational nature, this may still be taxable where the event takes place (see VATPOSS08250).

The liability of educational services is dealt with in the manual covering the liability of education. There is also an extra-statutory class concession allowing the zero-rating of training services supplied in the UK to non-UK governments for the purposes of their sovereign activities - see Notice 741A: Place of supply of services.

Educational services within this section are those where the teacher and the pupil are in the same place at the same time when the supply of education is made, for example in a classroom.

However, where educational services are supplied when the supplier (the tutor) is in one country and the customer is in a different country the supply is not regarded as a where performed service. That is because the supply does not constitute a physical performance and has the added difficulty of deciding in which country the place of supply is. That does not mean that the supply is not one of education: it simply means the supply is not covered by this rule. The exemption for supplies of education can therefore still apply (see VATEDU).

Where an educational service involves the pupil interacting with a computer and there is minimal human involvement, the supply may be an electronically supplied service (see VATPOSS13550).

Correspondence or distance learning courses are included within this section when they involve an element of classroom training. When the course includes books or literature, it is important to first consider whether you have a single supply or a multiple supply. If you have a single supply which includes a tutorial element then it is most likely to be a supply of education, the books and course materials being integral elements. Further advice can be found in VATEDU. A single supply of books and other learning materials will not fall within this section. If you have a multiple supply, only the supply of the education will fall within this section.

Flying training is treated as supplied wholly outside the UK provided the trainer aircraft leaves UK airspace and proceeds directly to a destination abroad, and at least 12 hours training is provided at that place.

Sailing training is treated as supplied wholly outside the UK provided all of the training is carried out on a vessel which clears UK territorial waters. Also, it must remain outside UK territorial waters for the whole of the period of training (except for proceeding directly from and returning directly to the UK).