TC09534 - [2025] UKFTT 00594 (TC)

Fecha: 24-Abr-2025

DCI – private tuition

DCI – private tuition

91.

The question is whether the members of DCI who taught classes were acting on their own account and at their own risk, independently of an employer.

92.

As noted above, we accept that the 2017 LLP agreement is the relevant document on the basis that this has superseded the unsigned and undated 2016 agreement. This was not challenged by Mr Marks on behalf of HMRC.

93.

There is no suggestion that the members of the LLP were employees of the LLP. As we have noted, the authorities show that the employment status of the teacher is irrelevant. The question is whether they are providing their services in the context of supplies made by a separate taxable body.

94.

In one sense it might be said that partners of a partnership are providing tuition in relation to courses offered by the partnership. However, in the context of an ordinary partnership formed under the Partnership Act 1890, Mr Marks accepted that any tuition provided by the partners is private tuition as that tuition is provided by the partners for their own account and at their own risk as partners in the partnership.

95.

In the case of DCI, Mr Marks initially put forward two main reasons why the classes taught by other members of the LLP did not constitute private tuition:

(1)

The evidence showed that the non-designated members of the LLP were, in effect, responsible to the LLP as a whole so that the effect was as if the LLP was an employer.

(2)

Although the members of the LLP were entitled to a profit share (and therefore the teaching which each member did had an impact on their remuneration), in order for an individual to be undertaking an activity on their own account and at their own risk, it was necessary for that individual to receive the whole of the fee for the classes which that person taught (less any relevant expenses).

96.

Although it might be possible that the position of an LLP is different to that of a general partnership as an LLP has legal personality (and we express no view on this), Mr Marks confirmed that this was not a distinction which HMRC sought to draw in the present proceedings. In the light of this, Mr Marks accepted that, if his points were right, this would mean that classes taught by a partner in a general partnership could not qualify for the private tuition exemption. As HMRC accept that this is not the case, Mr Marks agreed, on behalf of HMRC, that this aspect of their defence to DCI’s appeal should be withdrawn.

97.

As a matter of principle, DCI’s appeal against the registration decision therefore succeeds but the parties agreed that the effect of this will need to be discussed between DCI and HMRC taking into account which classes were in fact taught by members of the LLP (as opposed to other individuals) and whether the classes in question relate to activities commonly taught in schools or universities (which, in the case of DCI, was not an issue for determination in this appeal).