Teach me to dance
Private tutors don't have to charge VAT as long as they are teaching a subject that is 'ordinarily taught in schools and universities'. HMRC accept that this exempts lessons from self-employed golf or tennis professionals, as well as maths or English coaching for exams.
They didn't accept that it applied to courses offered by a belly-dancing school. The owner argued that dancing is taught in schools, but the Tribunal agreed with HMRC. Her customers wanted to learn how to dance, not to engage in an academic study of dance. It was recreational, not educational.
Sometimes VAT exemptions are straws clutched at by traders who failed to notice that their turnover had gone over the VAT threshold – £79,000 at the moment – to save them from registration and a demand for back tax. There have been several cases in which businesses have claimed to be educational: this one seems the closest, and still did not succeed.
The main lesson is to keep a close eye on your turnover – you are supposed to measure it at the end of every month if you are not VAT-registered, and if the last 12 months goes over the threshold, you're supposed to tell HMRC within 30 days. Don't find out later and have to try to come up with a reason why some of that £79,000 wasn't VATable.
