VQOTW: POSS Educational services via internet

My limited company client is a Maths lecturer providing educational services, both directly to individual students, and to businesses who supply my client’s services on to their own students all over the world. Due to the current pandemic, they have had to adjust their working practices and now deliver all of their classes via live internet streaming. What is the VAT position of this work?

The VAT treatment will vary depending on whether their customers are individuals or businesses and where their customers belong.

Supplies to customers who are in business, will fall under the business to business general rule meaning the place of supply is where the business customer belongs. If the customer belongs outside the UK it therefore means that the supply is outside the scope of UK VAT. A VAT number is best evidence that your customer is in business. However if your business customer doesn’t have one, for example because they are based outside of the EU, then you can accept alternative evidence such as certificates from fiscal authorities or other commercial documents indicating the nature of the customer’s activities in their home country.

Business to consumer (B-C) supplies are less straight-forward. Where the consumer belongs in either the UK or the EU, the supply falls under the B-C general rule, with the place of supply being where the supplier belongs. Although streamed via the internet, these do not fall under the special rules for electronically supplied digital services, as they are performed live with significant human intervention. Therefore the VAT MOSS rules do not apply.

For B-C supplies of education to individuals based outside of the EU there are special rules within VATA1994 Schedule 4a Para. 16. For these supplies the place of supply is again where the customer belongs and so outside the scope of UK VAT. This is confirmed in HMRC’s Place of Supply of Services Manual VATPOSS13250.


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Tony joined HMRC in 2015 where he managed a cross-tax Hidden Economy team specialising in failure to notify compliance work and evasion. He developed a sound understanding of VAT as well as gaining significant knowledge of the compliance penalties regime and Schedule 36 compliance powers.

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