11 October 2018 
Andrea Marshall, Tax Specialist
An update from EY states that the Office for Students (OfS) has communicated an imminent VAT law change with respect to education providers registered with the OfS in the Approved (fee cap) category. The details to be announced by Treasury will be released in the near future, and EY consider this may form part of the pending Autumn Budget (29 October). Relevant providers will be eligible for the same VAT exemptions as currently apply to traditional universities and providers eligible for public funding from the OfS. The changes are expected to take place with effect from 1 August 2019.
This change is not expected to affect ‘traditional’ universities, as HE providers with University title or College of University status should be unaffected by the changes, and providers with Approved status may also still be able to access VAT exemption through other routes, for instance, by being an eligible body that does not distribute profit and meeting the relevant eligibility criteria.
EY Comment: This will be welcome news for education providers impacted by the change, as well as students who will feel the benefit through not paying an additional 20% on tuition fees. Education providers affected by the change may wish to review the implications on its partial exemption position ahead of the implementation date. EY are also reviewing the possibility to revisit the retrospective position of such providers once they are recognised under UK law as an eligible body with similar objects to equivalent public law bodies. Should you need to discuss then please do feel free to contact Damian at EY (dshirley@uk.ey.com) or your usual adviser.
