The FTT recently considered the VAT exemption in VATA 1994 Sch 9 group 6 item 12 in the case of Audrey Cheruvier (TC03148). Exemption applies to ‘the supply of private tuition, in a subject ordinarily taught in a school or university, by an individual teacher acting independently of an employer’.
The appellant offered private tuition in belly dancing, with a programme allowing dancers to progress through various levels. She argued that the tests for exemption were met but the FTT disagreed. The judgement and rationale is well set out and logical.
There are several strands to the question of whether belly dancing is a subject ordinarily taught in a school or university:
Firstly, are there any educational institutions in the UK offering study programmes in dance? Evidence was provided that there are several offerings. Therefore at face value the test is met. HOWEVER it is necessary to dig deeper and establish whether they are on all fours with the appellant’s programme. It was found that the dance study programmes offered by schools and universities had a much broader curriculum, not solely focused on the physical performance of the dance style but also including elements such as theory on the impact of dancing on muscle groups and the history of particular types of dance. The appellant’s offering focused on the physical performance. Therefore it did not mirror a course offered at a school or university. The purpose of this exemption is to allow private tuition to compete on a level playing field with the same study offered in a formal educational establishment.
Secondly, does belly dancing as a style of dancing qualify? The school and university programmes focused on mainstream dance styles such as street and ballet. The FTT did not dwell on this issue but, had it been the core argument, it is reasonable to assume that it would have qualified as it would offend the concept of fiscal neutrality to say a particular style of dance is excluded if all other tests are met.
Ultimately the FTT determined that the dance school was offering a recreational activity and as such exemption did not apply. HMRC’s manuals state that sporting and recreational activities can be exempt provided the other conditions are met in terms of analogous content.
This is another perfect example of the ‘devil lying in the detail’ – there should be no element of doubt whatsoever for a business operating in a B2C environment, as the risk of the treatment being successfully challenged can be catastrophic for the business.
To find out more contact Julie Park at The VAT Consultancy on 01962 735350 or via e-mail at email@example.com