Tel: 01736 795753
This email address is being protected from spambots. You need JavaScript enabled to view it.

VAT – driving schools who supplies services?

Source: HM Revenue & Customs | | 02/12/2021

The VAT liability of the supply of driving lessons is an interesting issue that can be of relevance to other supply scenarios such as hairdressers and other workers in the beauty industry. 

In HMRC’s internal manuals the guidance identifies three possible scenarios that can apply to someone providing driving lessons to the public:

  • The driving school employs its own instructors under contracts of service. HMRC comments that this method is probably only used in a minority of cases. When this is the case, the driving school is supplying the tuition to its pupils and must account for output tax on the full value of fees received. The driving school is making the supply of tuition to its customers and there is no supply by the individual instructors, who are simply receiving remuneration (wages) for their services as employees. 
  • The instructors supply their services to the school under a contract of services. They need only account for output tax on these supplies if the value exceeds the registration limits. The school must account for output tax on the full value of the fees received from pupils.
  • Each individual instructor supplies tuition services directly to their pupils using the driving school as an agent. Output tax is only due on the value of those supplies if an instructor exceeds the registration limits. However, payment made by each instructor to the school is consideration for a supply of agency services by the school, and the school must declare output tax accordingly. 


Search Archive


Latest News

Leaving gifts to charity in your Will
20/01/2022 - More...
The government introduced new rules to encourage charitable giving on death in 2012. The rule which

Tax relief for working from home
20/01/2022 - More...
If you are an employee working from home, you may be able to claim tax relief for some of the bills

Replacement of domestic items in let property
20/01/2022 - More...
The replacement of domestic items relief has been in place since April 2016. The relief allows

Search

Our Address

Greenwood Wilson
The Old School
The Stennack
St Ives
Cornwall
TR26 1QU

Contact Us

tel: 01736 795753
fax: 01736 798642
This email address is being protected from spambots. You need JavaScript enabled to view it.

 

Mobile Apps

To download our APP search for Informanagement and enter the code Greenwood.

 

Newsletter

With our newsletter, you automatically receive our latest news by e-mail and get access to the archive including advanced search options!

» Sign up for the Newsletter
» Login