VATGPB11030 - Government departments and health authorities: Contracted Out Services (COS) Headings: COS Heading 65 - Training, tuition or education

Includes

  • Training, tuition or education services delivered face to face and/or online by a trainer, teacher or tutor.
  • Training and education services which are not delivered directly by a person either face to face or online, but require a significant amount of interaction on the part of the person receiving the training or education in order to serve its purpose. Some distance-learning or e-learning packages may meet this definition. By ‘interaction’ we mean that the user will be required to interact with the training or education package in a substantial way to realise its benefit – for example, the user may need to complete real-time interactions and receive corresponding feedback while progressing through the training package, and assessments may be performed with the results recorded. Interactions with a person may also take place online, although not necessarily in real-time. Tuition, by its nature, is expected to be delivered by a person face to face and/or online,

Excludes

  • VAT incurred on separate supplies of accommodation, meals and room hire provided in relation to the training , tuition or education being provided.
  • Supplies involving access to information designed to aid training, tuition or education: this would be a supply of learning materials rather than a supply of training, tuition or education itself. Supplies of online manuals and webinars are likely to fall into this category.
  • Services involving access to training, tuition or educational packages which are not interactive in nature.
  • VAT incurred on activities which couldn’t have been performed in-house by qualifying bodies (for example, charges for exam services in relation to professional qualifications, although these are likely to be exempt from VAT). However, due to the range and nature of the services that may fall under Heading 65, it is recognised that it may be difficult to determine whether a particular type of training, tuition or education has previously been performed in-house within Government. As such, it should be determined whether the particular type of training, tuition or educational service in question is, on a balance of probabilities, likely to have been performed in-house within Government previously. If this is the case, it is accepted that the VAT is recoverable under H65. [Further guidance, including worked examples, are available via the Tax Centre of Excellence website].

Generally, this Heading will apply where costs are incurred for the training, tuition or education of a qualifying body’s own employees. However, it could also apply to supplies delivered to non-employees where the qualifying body acts under its own statutory remit to deliver training to those non-employees in a non-business capacity. In this circumstance, HMRC would expect the cost to be paid from the qualifying body’s own budget and that no recharge would be made to the other party.

However, when the training, tuition or education relates to a business activity, VAT should not be reclaimed under this Heading. A VAT reclaim may still be possible but should be made under normal VAT business rules.

It should be noted that education and vocational training is exempt from VAT (so there is no VAT to recover) if it is provided by one of the ‘eligible bodies’ listed in HMRC Notice 701/30: “Education & Vocational Training”. In practice these bodies are:

  • Schools for the under-19s
  • Universities
  • Further and Higher Education colleges
  • Other public bodies
  • Non-profit making bodies that reinvest surpluses of income back into the courses they provide

Further guidance, including worked examples, is available via the Tax Centre of Excellence website.