Examination and registration fees – exempt?

[Anonymous]

Our company provides exempt educational courses to universities and colleges which they receive funding for. In the past the student registration and examination fees charged to us have also been exempt but our new examination body will not exempt these fees for us. As we are unable to claim the VAT back this is obviously now causing us a great expense. I’ve tried looking at the relevant VAT notices but I’m struggling to decipher why the previous exam body agreed to exempt the fees for us but the new one won’t. Does anybody know what information we need to supply the new exam body with in order for them to exempt the registration and examination fees?

Many thanks for any advice.

[Marie Stein]

Hi Lynz

I have to be honest, I don’t know why the new exam body is charging you VAT.

You will appreciate that here on the forum I can only give very general guidance about the VAT liability of any specific supply. However I’m not aware of any recent changes to the VAT legislation that would change the conditions whereby the provision of examination services can be exempt from VAT.

HMRC recently published an updated version of the VAT leaflet: Education and vocational training 701/30, (June 2011) http://tinyurl.com/64s43sw and the explanation of when examination services can be exempt from VAT at section 7 of the leaflet does not appear to have changed.

The legal provision which exempts examination services is VAT Act 1994, Schedule 9, Group 6, Item 3. As you are doubtless aware, the exemption only applies in limited circumstances, including when the supplies are made to “eligible bodies”, which normally includes colleges and universities, as explained in section 7 of the VAT leaflet. So unless there has been some change in your status as an organisation or the nature of the new contractual arrangement is somehow different, I don’t see any reason why the supply should be liable to VAT.

I would suggest asking the examination body concerned to review its policy about charging VAT by referring to the legislative reference above and the relevant section of VAT leaflet. If they are still not willing to exempt their services at this point, you may wish to contact HMRC to request a formal ruling on the issue. HMRC doesn’t normally give rulings to recipients of supplies (because the VAT liability of any supply is normally the responsibility of the person making the supply), but if the new examination board isn’t willing to reconsider the situation and you still feel that the supply should be exempt, then HMRC should be willing to look into the issue. And of course I’d be happy to advise formally through my consultancy service if you need any further help.

Marie

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