Warning – VAT ahead for Training/Education providers supplying overseas Students (B2C supplies)

In the UK we have a VAT Exemption for the provision by “eligible bodies” of online education which has human/live interaction at its core. We also have place of supply rules that put the VAT accounting for such training by commercial providers as being the place of the supplier – which makes their supplies subject to UK VAT.

Even currently it’s not an area without complexity therefore, as we debate what level of human interaction could remove the supply from being regarded as an “electronically supplied service” (ESS) under the existing VAT rules which can trigger overseas VAT registrations or the option to use of the One Stop Shop regime for UK providers.

This whole area will see a seismic VAT change from the 1st Jan 2025 as the EU brings onboard changes raised from its VAT in the Digital Age (ViDA) review.

From the 1 Jan 2025 for supplies into the EU of such B2C online services the debate over how the content is delivered will disappear and any such educational or training services supplied on a B2C basis – where they are streamed online will become taxable where the consumer/student lives.

This will prompt a change for both universities, colleges and the commercial providers and we are already helping these sectors to understand – for example – the way in which the Non Union One Stop Shop (OSS) could be used to ease reporting in this regard.

If your organisation is affected in this way then do get in touch if VAT assistance would be a help. We will be running events to explain the basic rules aritsound this area in the coming months – to register your interest in attending then do drop your details to IndirectTax@Xeinadin.com and we’ll alert you when dates are in place.

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