TC09534 - [2025] UKFTT 00594 (TC)

The exemption for private tuition is contained in item 2 of group 6 in schedule 9 to the Value Added Tax Act 1994, which reads as follows:

“The supply of private tuition, in a subject ordinarily taught in a school or university, by an individual teacher acting independently of an employer.”

The equivalent provision in the Principal VAT Directive (Directive 2006/112/EC) is to be found in Article 132(1)(j). The exemption is for:

“tuition given privately by teachers and covering school or university education”.

These exemptions have been considered in a number of cases in the First-tier Tribunal but have only been considered once by a higher Court/Tribunal, which was the decision of the Upper Tribunal in HMRC v Cook [2021] UKUT 15 (TCC). That decision is of course binding on us although we should note that there was no significant difference between the parties as to the basic legal principles which should be applied. The dispute is rather about the way in which those principles should be applied to the facts of these particular appeals and also whether those principles can be developed to cater for the circumstances of these appeals.

Both parties agree (as did the Upper Tribunal in Cook at [7]) that the exemptions in item 2 of group 6 in schedule 9 to VATA and in Article 132(1)(j) of the Principal VAT Directive are identical in their effect.

There is therefore no need for the appellants in this case to rely on the direct effect in UK law of the Principal VAT Directive, although, again, both parties agree that the appellants are entitled to do so, even though the UK is no longer part of the EU. The parties also agree that one consequence of this is that s 6 of the EU Withdrawal Act 2018 is engaged which, generally speaking, means that the effect of the relevant provision should be determined in accordance with EU cases decided before 1 January 2021, and that the Tribunal should have regard to any EU decisions on or after that date.

Given that the parties are agreed on this point, and that, in our view, their conclusion cannot be doubted, we will not explain in detail the reasons with this conclusion. We note that Mr Chapman referred to the decision of the Supreme Court in Lipton v BA Cityflyer Limited [2025] AC 154 at [81-87] for an explanation of the relevant principles. We also note that the position is bolstered in relation to VAT by s 28, Finance Act 2024, which provides that, for most purposes, s 4 of the EU Withdrawal Act 2018 continues to apply for VAT purposes, despite its revocation for other purposes by the Retained EU Law (Revocation and Reform) Act 2023.

We will focus on the wording of the domestic UK legislation given that it is not suggested that the wording of the exemption set out in the Principal VAT Directive has any different effect. For the purposes of the issues which we need to determine, there are two distinct elements to the exemption:

Before exploring the meaning and effect of these two requirements, we note that the CJEU in Werner Haderer v Finanzamt Wilmersdorf (case C-445/ 05) made the following observations at [18] about the predecessors to the exemptions now contained in Article 132 of the Principal VAT Directive:

“The terms used to specify those exemptions are to be interpreted strictly, since they constitute exemptions to the general principle that VAT is to be levied on all services supplied for consideration by a taxable person… Nevertheless, the interpretation of those terms must be consistent with the objectives pursued by those exemptions and comply with the requirements of the principles of fiscal neutrality… Thus, the requirement of strict interpretation does not mean that the terms used to specify the exemptions referred to in Article 13 should be construed in such a way as to deprive the exemptions of their intended effect”.