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bigduckontax, Accountant
Category: Tax
Satisfied Customers: 4808
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I run a training company helping people to set up their own

Customer Question

I run a training company helping people to set up their own estate agency. We provide a training manual with all the relevant documents plus consultancy support service. We currently supply the service as a multiple supply charging zero rate on the books and standard rate on the one-to-one consultancy support and training; I would like to know if it is permissible to provide this service charging separate VAT rates.
Kind regards
Submitted: 3 years ago.
Category: Tax
Expert:  bigduckontax replied 3 years ago.
, I'm Keith and happy to help you with your question. Get yourself a wet towel to wrap around your head before reading!
I would draw your attention to VAT notice 701/30, you can find it here:
In particular:
'Vocational training is provided charge (see paragraph 5.3). The VAT consequences are:
• eligible body, other than a commercial provider of tuition in EFL (see section 4), the vocational training is exempt; or
• non-eligible body (see section 4), the vocational training is exempt to the extent that it is funded under an approved government funding scheme (see section 13)'
From this I deduce that if your company is 'not funded under an approved government funding scheme' your training is thus a standard rated supply.
Your proposals are quite proper. The supply of books is a zero rated supply whilst the training itself is probably standard rated. It is perfectly admissible to issue a split invoice, some supplies at the standard rate and some at zero rate providing each invoice quotes an unique number, date of supply, VAT Registered Number, cost of supply and rate of VAT charged on each individual item. Personally, in the accounts I operate, I have separate ledger headings and zero rated supplies to ensure correct treatment and provide a permanent record in the event of an inquiry at some future date. All input taxes may be reclaimed.
Beware though if by chance you are funded by an approved government funding scheme. Your training now becomes exempt from VAT. This limits the reclaim of input tax to the proportion of your outputs which are standard, reduced or zero rated supplies. On the other hand the VAT threshold only applies to standard, reduced or zero rated supplies so might push you below the threshold and make VAT accounting unnecessary.
There you are, a quick canter through the VAT minefield. I suppose I am fortunate (?) having been involved in VAT accounting since the tax was introduced in the early 70s.