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TaxRobin
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My wife runs a swimming instruction business as a sole

Resolved Question:

Hello,
My wife runs a swimming instruction business as a sole trader. She also employs teachers who are paid as PAYE. We have been advised that this business is VAT exempt as it is a form of education. As we are approaching the VAT threshold I would like some clarity on this.
Many thanks
Submitted: 7 months ago.
Category: Tax
Expert:  TaxRobin replied 7 months ago.

Hello

You must define that her activity is a business.

Educational institutions that are in business

These establishments require payment for the education they provide, so their education is a business activity:

  • independent fee paying schools, including non-maintained special schools
  • universities; and
  • institutions teaching English as a foreign language

Education and training is exempt from VAT for business.

https://www.gov.uk/guidance/vat-exemption-and-partial-exemption

Customer: replied 7 months ago.
I'm sorry that's not very clear to me, are you saying that as a business providing education, she will be exempt from VAT? From the link in your reply I found this document, VAT Notice 701/45: sport which appears to say that as a profit making business we will not be exempt.
Expert:  TaxRobin replied 7 months ago.

An educational institution is exempt.

The fees for the instruction that are paid are exempt from tax. She is not a non profit sporting service.

This is instruction her activity is involved in.

Under the same VAT notice you cited the conditions are spelled out.

Her business is instructing not a sporting activity.

Customer: replied 7 months ago.
Thank you, that's starting to make sense. Can you tell me if the whole of the business turnover is exempt, or just the portion that my wife undertakes as she does employ other teachers. From what I can read in the general notice you mentioned the case would be that the work apportioned to her is exempt, that which the other teachers undertake is liable for VAT if over the threshold.Thanks
Expert:  TaxRobin replied 7 months ago.

They are paid under PAYE so their amounts are not subject to VAT. Your wife's business is the VAT subject not employees.

The amounts charged to students is under the business not individual instructors.

Expert:  TaxRobin replied 7 months ago.

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TaxRobin, Tax Consultant
Category: Tax
Satisfied Customers: 14422
Experience: International tax
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