Gravita’s tax consultant, Tim Palmer, gives his experiences relating to sporting private tuition and VAT.
Many years ago, I was presenting a tax update lecture in Central London. During the course of the lecture, I reminded the delegates that if they had an individual client who was giving private tuition in a subject ordinarily taught in a school or university, such tuition would be exempt from VAT.
A few days later, I received an email from an accountant who had attended the lecture. He stated that he acted for a very well known tennis coach who gave tennis lessons in West London. His turnover was in excess of £100,000 and he was VAT registered. The accountant wanted to know, in light of my lecture, whether this tennis tuition would be exempt from VAT.
I initially reminded the accountant that the tuition must be given by a sole trader or a member of a partnership in a personal capacity. Any tuition provided through a limited company would always be VAT standard rated.
The accountant stated that the individual was indeed a self-employed tennis coach and had been for several years. Was this tennis coaching private tuition exempt from VAT?
I subsequently met the accountant and we discussed this matter further. Tennis had been taught at my school and the accountant stated that it had also been taught at his. I assisted him in making the VAT claim. However, HMRC initially rejected it. Heavy correspondence was duly exchanged!
We stated that, in our view, tennis was ordinarily taught at school. Indeed it is! I attended Forest School, Snaresbrook in London, where tennis tuition was taught within the curriculum. Indeed, shortly after I left, Forest School produced two professional tennis players, namely David Felgate and Mark Petchey. David played tennis at Wimbledon and subsequently became Tim Henman’s coach for many years. Mark had a very distinguished professional tennis playing career and subsequently became Andy Murray’s tennis coach!
HMRC eventually conceded that tennis did qualify for this VAT exemption!
We then assisted a tax adviser whose client was giving lessons in high performance sailing, which was taught at university. He also successfully claimed the VAT private tuition exemption.
We have previously assisted an accountant in successfully claiming that private golf lessons, given by a qualified individual golf professional, were subject to the VAT exemption.
One of my relatives is a golf professional. He previously attended a year’s golf course at Bournemouth University. We stated this in our claim. We also relied heavily on the Marcus Webb VAT case. In this case, HMRC conceded that private golfing tuition and lessons came within the scope of the VAT exemption.
It is amazing how many golf clubs (and their golf professionals) are not aware of this VAT exemption. I was lecturing recently at the conference centre within a big golf club. I noticed an advert there for lessons by the golf professional. He was charging VAT on his tuition!
It is obviously best for these individuals not to incorporate. If they do so, they lose the VAT exemption!
Finally, I raised this VAT topic at a tax update lecture that I was presenting earlier this year. At the end, a lady came up to me and told me that she had a client who gave private tuition regarding the sport of polo. She stated that this polo tutor had successfully claimed the VAT exemption, which I was rather surprised about!
It should be noted that it is not just private tuition in one-to-one lessons that qualifies for this VAT exemption. The polo coach could give a joint lesson, and this would qualify. Indeed some subjects such as polo need more than one student for the lesson to work and be effective.
There is considerable scope for VAT planning and claims in this area!
Tim Palmer CTA ATT
