Is private tuition VAT exempt?

The conditions

• The tutor is a sole proprietor or a partner in a partnership.
• The tutor delivers the tuition personally.
• The subject is one taught regularly in a number of schools or universities, such as maths, English, sciences, languages or music.

Nothing in these conditions depends on where the lesson happens, so they work the same way whether you teach at a kitchen table, in a hired room or by video call.

When tuition is standard-rated

• A limited company sells the tuition, even if the tutor owns the company. The exemption is for individuals and partners, not companies.
• A sole trader or partnership engages other tutors. Their own tuition can still be exempt, but the tuition other people deliver for them is standard-rated.
• An agency supplies tuition as principal rather than simply introducing a self-employed tutor to the family.
• The subject is not one taught in schools or universities, for example most hobby or leisure classes.

Does this affect many tutors?

Most individual tutors earn well under the £90,000 VAT registration threshold, and exempt income does not count towards it anyway. The rules matter most for tutors who registered for VAT because of other taxable income, or who registered voluntarily and have been charging VAT on tuition that was in fact exempt.

If you have charged VAT on exempt tuition

VAT you accounted for on exempt tuition in the last four years can be claimed back, less any input tax you recovered on related costs. HMRC can refuse if your customers bore the VAT and you would be unjustly enriched. If all your income turns out to be exempt, you may need to cancel your VAT registration, because a business that makes only exempt supplies cannot stay registered. See reclaiming overpaid VAT and unjust enrichment.

Sources

1. VAT Notice 701/30, private tuition: GOV.UK
2. VAT Act 1994 Schedule 9 Group 6: legislation.gov.uk
3. VAT Notice 700/11, cancelling your registration: GOV.UK