VAT on Private Tuition

A recent First Tier Tribunal case gave us a useful reminder of the rules governing the VAT treatment of private tuition. In Rushby Dance & Fitness Centre v HMRC (TC09534), the lead appellant and three other dance tutors unsuccessfully argued that their dance classes qualified as VAT-exempt private tuition.

The exemption for private tuition is contained in the Value Added Tax Act 1994 (Schedule 9, Group 6, Item 2): “The supply of private tuition, in a subject ordinarily taught in a school or university, by an individual teacher acting independently of an employer.”

In order to qualify for the exemption, two main tests must be met:

·       The teacher must be acting independently of an employer - this would generally apply to a sole trader or partner providing tuition in their own name. Any tuition carried out by an employee of a sole trader or partnership would not qualify, nor would any private tuition provided by a limited company.

·       The subject being taught must be one that is ordinarily taught in a school or university - this is the issue that was considered by the tribunal. The subjects under consideration were ballroom dancing, Latin dancing, sequence dancing and ‘dancercise’ - a hybrid of dance and aerobics. The First Tier Tribunal found that none of the subjects were ‘ordinarily’ taught in schools or universities.

Previous tribunals have found that horse riding and golf are ordinarily taught in schools or universities and therefore qualify for the exemption. The list of tribunal-tested subjects that do not qualify is much longer and includes belly dancing, yoga and transcendental meditation! This shows how difficult it can be to ascertain the correct VAT rating for private tuition. Professional advice can help you to navigate this area more confidently - and we are here to help you!