Charged VAT on exempt service - wtf

[wellthisisstrange11]

Booked in a tuition session for a professional qual - it's pretty expensive, advertised at around £90 for an hour so wanted to make the most of it. Being delivered by someone who works in the industry as a way to make extra cash, I assume - they are a finance professional so familiar with taxes.

The invoice has just come through with an additional 20% whacked on as "tax" - it seems to me that private tuition is an exempt supply but regardless shouldn't they have told me this when I booked?

The session is in 15 mins, I haven't paid yet but quite annoyed

Just ask at the start of the session

Did it say tax or Vat? Are they vat registered?

There are exceptions to the exemption rule. Off the top of my head, I think one of them is whether or not it is a school subject...but I’m not a VAT expert so could be wrong on that score.

As to whether or not it’s should be mentioned...yes, I suppose I’d expect a quote to be specific as to whether it was net or gross but I’d probably query it if it wasn’t specific because I am a tax geek.

Thanks all, tbh Im not really sure how to address it! I imagine just pay? Also a slight tax geek (well I know a tiny bit about it) and in my experience have never had to pay fees net of tax before - generally always advertised gross - seems weird. It is just described as "tax" not "VAT"

I have always been annoyed at paying VAT on first aid courses as they don't feel like a luxury item but I am not sure which training is exempt and which isn't. It does feel like it should be labelled as VAT if that is what it is though, not simply tax.

@wellthisisstrange11

Booked in a tuition session for a professional qual - it's pretty expensive, advertised at around £90 for an hour so wanted to make the most of it. Being delivered by someone who works in the industry as a way to make extra cash, I assume - they are a finance professional so familiar with taxes.

The invoice has just come through with an additional 20% whacked on as "tax" - it seems to me that private tuition is an exempt supply but regardless shouldn't they have told me this when I booked?

The session is in 15 mins, I haven't paid yet but quite annoyed

If you don't specifically quote your fees exclusive of VAT, your fees are deemed to be inclusive of VAT. So without stopping to consider whether this is a taxable supply or not, you can be certain you shouldn't be paying extra.

As for VAT - it's bloody weird. Many finance professionals don't understand it unless they specifically work in VAT.

Before you pay, tell them you need a vat receipt.

Posted too soon. Their reaction will tell you something.

Ask them for their VAT registration number as you need it for your records

If it's an individual delivering the lesson and invoicing you, it should be VAT exempt. If they're an employee and the invoice is from a tutoring company, I believe there would be VAT charged - but agree with the pp - if they are quoting £90 an hour that is what you should be charged - inclusive of any VAT.

Given it's a professional qualification it's unlikely to be VAT exempt. School subjects taught by sole traders are VAT exempt to stop teacher tuition being prohibitively expensive and bureaucratic.

Advertising a non-VAT prices is terrible and would put me right off.

Tell them you're only willing to pay £90, as they advertised at that rate and should be considered inclusive.

Most goods & services are subject to VAT if the company’s turnover is over £85,000 pa, (the exact figure may have changed) the business should be VAT registered. The website should quote the price plus VAT, it could be that they have recently registered. If they are charging VAT their VAT number must be shown on the invoice.

Given it's a professional qualification it's unlikely to be VAT exempt

My employer offers health and safety related training that's not subject to VAT.

My understanding is that if you offer your goods or services to members of the public, the VAT incl price should be shown.

I would also wonder about 'someone in the industry' offering the tuition on the side. If they're doing it separately to their employer, they'd probably not need to charge VAT, if this training is indeed subject to VAT, unless they personally were trading above the VAT rate.

Sounds like asking for the VAT number (which should appear on the invoice if they are charging it) is a good start. Say you need it for your own VAT return - they wouldn't know whether or not you would be VAT registered yourself.

We charge vat on our training as delivered in the UK. We advertise prices as net with associated vat. It's a huge grey area. If you are being charged vat, you should receive a full vat invoice

If the trainer is VAT registered they HAVE to charge VAT
CPD is almost always VAT standard rated

they should have clarified at the time of booking
and they will give you an invoice with the VAT on it

The only educational services that are 'exempt' from VAT are subjects usually taught in schools.

This is unlikely to be the case for professional qualifications.

So, with that caveat, if the trainer has turnover above £85k he has to charge VAT.

He can voluntarily register below that level.

If his customers are generally businesses then it would be usual to quote net prices.

Perhaps you are unusual as an 'individual' client, and not a business one?

£360 per hour though, WTF are they training in?

As mentioned before, my employer offers training that is not subject to VAT, but we are VAT registered and offer other services where VAT is charged. We are a big employer and will have taken advice and are unlikely to be doing this incorrectly.

Barbara
I am surprised that H&S business training is exempt as since 2015 the rules were tightened
www.gov.uk/guidance/vat-on-education-and-vocational-training-notice-70130

I have always been annoyed at paying VAT on first aid courses as they don't feel like a luxury item

VAT is not a tax on luxuries. There was a higher rate for luxuries in the 1970's, but that rate was abolished in 1979, according to wikipedia.

There are legal requirements for what information has to be included on a VAT invoice, including the VAT registration no and the word VAT rather than tax. Also you can check if they are vat registered

Stick to your guns and pay the quoted price - £90. They will have to take the loss. A good lesson for them to quote prices correctly. It's a piss-take.

@NotBrigitteBardot

There are legal requirements for what information has to be included on a VAT invoice, including the VAT registration no and the word VAT rather than tax. Also you can check if they are vat registered

It's possible he's in the process of doing a backdated registration and is charging an amount equivalent to VAT so he doesn't lose out. However, he still can't add on 20% if he's quoted a price without stating whether it's exclusive of VAT or not. This is his mistake.