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HMRC internal manual

VAT Taxable Person Manual

HM Revenue & Customs
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Particular trades: driving schools: who is making the supply - the three possibilities

With driving schools, the fundamental question to answer is: Who is supplying driving tuition to the pupils? There are three possibilities.

  • The driving school employs its instructors under contracts for services. The school therefore makes the supply of tuition to the pupils.
  • The driving school engages a number of instructors as self-employed contractors, under contracts for services. The instructors supply their services to the school, and then act as agents of the school in making an onward supply of tuition to the pupils.
  • the driving instructors are self-employed principals and supply driving tuition direct to the pupils. The driving school acts as an agent in bringing pupil and instructor together.

By using this guidance in conjunction with VTAXPER66200, VTAXPER66300 and VTAXPER66400 you will be able to determine which of the three scenarios applies to your trader.

How to decide who is making the supply

The steps to follow are:

  • Firstly, use VTAXPER66200 to make sure that you have to hand a package of information which is essential before you can make your decision.
  • Secondly, consider VTAXPER66300. This will help you to decide whether the driving instructors are employees of the school.
  • Thirdly, and only if the driving instructors are not employees of the school, move on to decide to whom the instructors supply their services. VTAXPER66400 provides guidance in this area.
  • Finally, consult VTAXPER66600 for guidance on the accounting consequences of your decision, including examples.