Lessons to be learned

Neil Warren gives some VAT saving tips and pitfalls to avoid in relation to supplies of private tuition

Why are the VAT rules on private tuition so important? One reason is because it is one of the few situations in the world of the nation’s favourite tax where the rules are different for an incorporated business compared to one that is unincorporated, such as a partnership or sole trader. And secondly, owners supplying private tuition services often have their fingers in other business pies (for example, a piano teacher also selling musical instruments), so there might be scope to do some business splitting as well, potentially avoiding the liability to register one or both entities for VAT. But great care is needed if this route is taken, as I will explain in this article.

Basic rules

Private tuition is exempt from VAT if two important conditions are met: