Explanatory note

This Order, which comes into force on 1 August 1994, substitutes a new Group 6 of Schedule 6 to the Value Added Tax Act 1983. Under this Order the exemption for education, research and training is redefined so that eligibility for exemption is no longer determined by the subject matter or profitability of individual courses. Instead, exemption is largely dependent on the type of body providing the education, training or research.

In the new Group 6, item 1 provides exemption for education and vocational training when provided by an eligible body, and for research when provided by an eligible body to another eligible body. The term “eligible body” is defined in Note (1). Notes (1)(e) and (2) provide exemption for certain commercial providers of English as a foreign language training but only to the extent that they provide such training. Note (3) defines what supplies are covered by the term “vocational training”.

Item 2 provides exemption for private tuition.

Item 3 provides exemption for examination services supplied by or to an eligible body or in connection with the supply of education or vocational training provided by a body or person whose supplies are exempt under items 1, 2 or 5. “Examination services” are defined in Note (4).

Item 4 provides exemption for supplies of goods and services, other than examination services covered by item 3, which are closely related to a supply of education or vocational training falling within item 1.

Item 5 provides exemption for supplies of vocational training made under a government-funded training scheme. Where such schemes are only partly funded by government, exemption applies only to the extent of that funding. Note (3) provides that for the purposes of item 5 “vocational training” also includes the provision of work experience.

Item 6 provides exemption for the supply of facilities by a youth club, or an association of youth clubs to its members, and Note (6) defines the term “youth club”.