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Q: My client is a UK private school that has implemented the new VAT treatment of its private school fees from 1 January 2025. They have a lot of overseas customers who send their children to this school and are insistent the new VAT rules do not affect them? Are they correct?

A. In short no. This is a 'business to consumer' supply of educational services (B2C) and as such the place of supply of those services is where they are physically performed since the pupil and tutor are in the same country. As this is the UK, these private school fees have a UK place of supply and so, as a result of these new law changes, will be subject to UK VAT at the standard rate. If, however, there are other supplies being provided to the pupil that are genuinely separate to the education (and not artificially split out from the tuition fee), these may have a different VAT place of supply or liability so it is important to check what is being supplied and whether this is to be treated as part of the standard rated tuition fee, an exempt closely-related supply to the education or something completely separate in its own right.

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Markel Tax offers expert advice on UK tax and VAT via its helpline and provides monthly FAQs with questions and answers on common tax issues for businesses and practitioners.