VAT rules
Are examination services VAT exempt?
Short answer
Examination services are exempt when an eligible body supplies them, or when any provider supplies them to an eligible body or to a person receiving exempt education or funded vocational training. They include setting and marking exams, assessments, certification and registering candidates. Supplied to anyone else, they are standard-rated.
What counts as examination services
HMRC's guidance includes:
- setting and marking examinations
- making assessments
- other services that make sure educational and training standards are maintained, such as validation and accreditation
- certification
- registering candidates
Who you supply decides the answer
| Supplier | Customer | VAT treatment |
|---|---|---|
| Eligible body | Anyone | Exempt |
| Any provider | An eligible body, such as an FE college or university | Exempt |
| Any provider | A learner receiving exempt education or funded vocational training | Exempt |
| Any provider | A business for its staff, with no exempt education involved | Standard-rated |
Examples
- An awarding organisation that sets and marks exams for FE colleges supplies exempt examination services.
- A commercial assessment centre that assesses employees for a company, outside any exempt course, charges VAT.
- A company that accredits training courses run by other commercial providers charges VAT, unless those providers are eligible bodies.
The St Patrick's question
If a private college's courses were exempt because of the St Patrick's ruling, its students were receiving exempt education. It is not yet clear whether exam services supplied to those students or to the college follow that treatment. Anyone relying on this should take advice, because the Supreme Court appeal could change the answer.
Sources
- VAT Notice 701/30, examination services: GOV.UK
- VAT Act 1994 Schedule 9 Group 6: legislation.gov.uk