VATEDU39380 | VATEDU 39380: Group 6 Item 1: Education and vocational training provided by eligible bodies: Exclusions from Note (1)(b)

Once an education provider falls within Note (1)(b) all of its supplies of education and training (not only university education leading to a qualification) are exempt (see VATEDU39350). This is because UK law makes it clear that once an organisation has eligible body status all of its supplies of education are subject to the exemption. In addition, any associated supplies that are exempted because of eligible body status will also be exempt (for example closely related supplies of goods and services falling under Item 4).

However, HMRC has decided that an education provider which only delivers courses:

1. that are not available to the public at large (that is access is restricted to a specific class of persons rather than being dependent on academic ability – usually referred to as ‘closed courses’;

2. that do not lead, and are not intended to lead to a qualification;

3. where the participants are not treated as students of the parent university; and

4. are not subject to monitoring and validation by the parent company for quality assurance purposes (that is the courses are delivered independently)

is not acting as a college, institution, school or hall of a university and, unless it falls within the description of another part of Note 1, is not an eligible body. Any supplies of education must be taxed at the standard rate, subject to normal VAT rules.