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Posted Tue, 18 Jul 2023 11:27:29 GMT by
I run a 'non-eligible body' limited company that provides NVQ-type education services (academic level 3 regulated qualification, just not called an NVQ, in accordance with rules laid out and regulated by an Awarding Body) that are deemed to be standard rated - the individual being billed is funding the course themselves and the individual taking the course is being billed direct. Can I exempt the "examination services" part of the course fee? I estimate, on a fair and reasonable basis, that 75% of my time and my one part-time employee goes towards these services. We are experts in our field and so even basic enquiries require knowledge that is hard to just teach an admin assistant - we have to do it ourselves. There are also other ongoing costs to the business that result from offering the qualification that wouldn't be there if it didn't have to go through an Awarding Body. My company does all the setting of curriculum (against assessment criteria) assessments, marking, assessing and support etc. (coursework/portfolio) that form part of the regulated qualification and gets to decide whether students have reached the required standards to obtain the qualification. Indeed, without the qualification element, there would be no training course as a qualification is required to do this as part of an already existing job. Can I split sales into exempt examination services and standard rates training? I have been advised that similar businesses to mine also split sales into exempt examination services and standard rates training. Section 7.2 of Notice 701/30 and specifically VATEDU45500 - the detail here confirms these services are exempt but it's not 100% obvious as to why these services are exempt and if, in my case, they truly are. With regard to examination services income, this is a fee earned by the business and kept by my business as its income i.e. these are not disbursements that my business is simply passing onto the relevant Awarding Body - there are registration fee disbursements but these are specifically excluded from the calculations and identified separately. Any enlightenment would be appreciated as to whether exemption for examination services is the correct treatment here and why that is the case if it is.
Posted Wed, 19 Jul 2023 13:00:03 GMT by HMRC Admin 8 Response
Hi,
As stated in the guidance Notive 701/30 education and training can only be exempted when supplied by an eligible body
For examination supplies these would also be an exempt supply if provided by an eligible body.
If the examination services are provided by a non eligible body then the service can only be exempt from VAT if the person receiving the services is either an: 
•eligible body
•individual receiving education or vocational training that itself is not liable to VAT such as: •pupils of independent fee paying schools (as legally defined)
•pupils of community, foundation or voluntary schools
•students of further education colleges
•trainees on government approved training schemes
•employees receiving in-house training from their employers
Only in the above situations are supplies of examinations an exempt supply.
If the recipent is none of these then both the training and examination service would be standard rated
Thank you

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