A recent tribunal case has provided a useful reminder about when private tuition is, and isn’t, exempt from VAT.

In Rushby Dance & Fitness Centre v HMRC, four dance teachers argued that their classes should be VAT-exempt private tuition but the tribunal disagreed.

Under the current law (VAT Act 1994), private tuition is only exempt if:

1. It’s provided by an individual teacher acting independently (usually a sole trader or partner teaching in their own name – not a limited company or employee)
2. It’s in a subject ordinarily taught in a school or university

In this case, the subjects were ballroom dancing, Latin dancing, sequence dancing and a dance-based fitness class. The tribunal ruled that these subjects aren’t typically taught in school or universities so the VAT exemption didn’t apply.

Interestingly, some sports like horse riding and golf have been ruled VAT-exempt in past cases, as they’re often taught in schools or universities. But plenty of other activities have failed the test, including belly dancing, yoga and transcendental meditation.

It can be tricky to try to work out if private tuition qualifies for VAT exemption. If you’re unsure, professional advice can help and we’re always happy to assist.