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Revenue and Customs Brief 2 (2018): VAT - treatment of Advanced Learner Loans
Education providers may no longer treat advanced learner loans as exempt from VAT under VATA 1994, Sch 9 group 6 items 5 to 5C. Instead, VAT at the standard rate is due on the provider’s full charge for the education it provides to the student.
Advanced learner loans are provided under a contract between the student and the secretary of state for education and are administered by Student Finance England. They are not grants or funding and HMRC views them as a loan funded ultimately by the student rather than the secretary of state.
For details see Revenue and Customs Brief 2/2018.
Alison Horner, VAT partner at MHA MacIntyre Hudson, was disappointed that these services would no longer be VAT-exempt. She said: ‘An additional 20% charge on training could determine whether a private training provider succeeds or fails in the market.’
