Readers' forum : Song and dance

I act for a dancing and ballet school owned by two people on a commercial basis. It trades as a limited liability partnership (LLP). The business has never needed to register for VAT because total sales have always been less than the registration threshold. However to my shock fees have grown considerably in the past 12 months. The total annual income is now £125 000 and the LLP employs two full-time staff to assist with the lessons.

My question concerns the VAT liability of fees paid by students. As I understand it any fees relevant to classes wholly run by the partners is exempt from VAT – is that correct? Would any classes wholly run by the staff be standard-rated and included within the registration test? What about classes in which both staff and partners are actively involved? Would it help if we split the dancing and...