Reference
Education VAT glossary
Short answer
Plain English definitions of the terms used on this site, in alphabetical order. Each links to the guide that explains it in more detail where there is one.
- Alternative provider
- A higher or further education provider that is not a university, a college of a university or a further education college. The colleges in the St Patrick's case were alternative providers.
- Approved (fee cap)
- A category of registration with the Office for Students in England. Providers in it are eligible bodies for VAT. See eligible bodies.
- Box 6
- The box on a VAT return for total sales excluding VAT. It sets the 1% limit for correcting errors on a return.
- Capital Goods Scheme
- A scheme that adjusts VAT recovered on large property and similar costs over several years if the taxable use changes. See input tax.
- Goods and services supplied alongside exempt education, such as accommodation or catering, that are for the learner's direct use and necessary for the education.
- Delivery partner
- A provider that teaches a course on behalf of a university or college, which remains responsible for it. The Office for Students publishes data on students taught this way. See HNC and HND delivery partners.
- De minimis
- The limits under which a partly exempt business can still recover input tax linked to exempt supplies: no more than £625 a month on average and no more than half of total input tax.
- EAP
- English for academic purposes. English teaching aimed at study at university, before or during a course. See English language providers.
- Eligible body
- An organisation UK law allows to supply education VAT free, such as a school, university, FE college or qualifying non-profit. See eligible bodies.
- Exempt supply
- A supply on which no VAT is charged and which gives no right to recover the VAT on related costs.
- Fiscal neutrality
- The principle that similar supplies which compete with each other should be taxed the same way. The St Patrick's case turned on it.
- Franchise
- An arrangement where a university or college lets another provider teach one of its courses. Students are usually registered with the university or college.
- Four-year limit
- A claim for VAT accounted for in error must be made within four years of the end of the VAT period concerned. See reclaiming overpaid VAT.
- HNC
- Higher National Certificate. A level 4 higher education qualification, broadly equivalent to the first year of a degree. Pearson awards most HNCs.
- HND
- Higher National Diploma. A level 5 higher education qualification, broadly equivalent to the first two years of a degree. See HNC and HND delivery partners.
- Input tax
- VAT a business pays on its own costs. It can usually be recovered if the costs are used for taxable supplies.
- Lead provider
- The university or college that is responsible for a course taught by a delivery partner.
- Net claim
- A claim for VAT on fees less the input tax that would not have been recoverable if the fees had been treated as exempt.
- Output tax
- VAT a business charges on its sales and pays over to HMRC.
- Partial exemption
- The rules for businesses that make both taxable and exempt supplies, which decide how much input tax they can recover.
- Pre-sessional English
- An English language course taken before a degree starts, often a condition of a university offer.
- Protective claim
- An ordinary claim made now so that older periods do not fall outside the four-year limit while the law is uncertain. See why claim now.
- Standard-rated
- A supply that carries VAT at 20%.
- TEFL
- Teaching English as a foreign language. A commercial provider is an eligible body for its TEFL teaching only.
- Typical consumer test
- Judging whether two supplies are similar from the point of view of the typical customer. The Court of Appeal applied it to education in St Patrick's.
- UKPRN
- UK Provider Reference Number. The number that identifies a learning provider on the UK Register of Learning Providers.
- Unjust enrichment
- HMRC's defence to a refund claim where the customers, not the business, bore the VAT. See unjust enrichment.
- Validated degree
- A degree taught by one provider and awarded by a university that checks and approves the course. Validation does not make the provider an eligible body.
- Vocational training
- Training, retraining and work experience for paid employment, or voluntary work in areas such as education, health and welfare.