VAT Exemption

[matt.griffin]

Hello all,

We are a small training company in its second year of trading and we have just reached the threshold for registering for VAT.

The only service that we provide is education and training that is funded by the government. There is no exchange of money between us and our customers as it's all paid for by the government through various funding streams.

Does this qualify us to apply for exemption from VAT?

Kind regards,

Matt

 

[David Griffiths]

The basic position relating to VAT and training is given in HMRC notice 701/30.

The basic principles set out in section 1.2 state that the training is exempt to the degree that it is governmend funded.

Any additional charge to the receiver would be a standard rated.

Fuller details are given in section 13

Exempt supplies don't count towards the £73000 limit at which registration becomes compulsory, so there is no need to register. There would normally be little benefit in registering voluntarily as you can't recover any input VAT relating to exempt supplies.

So it's not a question of applying to be exempted from VAT, it's actually the case that you aren't required to register.