From education to employment

VAT on independent training providers will make young-adult education less competitive

Comment from Alison Horner, VAT partner at MHA MacIntyre Hudson

“HMRC has now clarified that private providers of vocational training for over-19s will be compelled to charge VAT on any training they provide that is funded by Advanced Learner Loans taken out by the trainee. Given the government’s very laudable ambition to encourage young-adults to take up vocational courses, or to retrain, many private providers were assuming that their services would continue to be VAT exempt. Unfortunately, we now know that this will not be the case.

“This is a peculiar approach from a government that last year claimed vocational education was at the heart of its industrial strategy, and which wants to avoid a Brexit-induced skills shortage. An additional 20% charge on training could determine whether a private training provider succeeds or fails in the market. Compelling private providers to charge VAT on their courses, and exempting government and not-for-profit organisations from the same charge, makes the adult skills market much less competitive.

“The government needs to raise revenue but undermining the future skills base of the nation does not seem a sensible way to approach this. We can only hope HMRC’s decision does not affect the quality of training provided to young-adult learners too adversely.”  

About MHA MacIntyre Hudson: A top 20 UK accounting firm, offering a full range of compliance and advisory services to entrepreneurial businesses, groups and multinationals with operations in the UK, and now to offshore investment funds. The firm has 90 Partners and over 700 staff in fourteen offices in London, the South East, East Anglia, and the Midlands and in the Cayman Islands. MHA MacIntyre Hudson is the UK member of Baker Tilly International, one of the world’s largest leading networks of independently owned and managed accountancy and business advisory firms.


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