VAT liability of school holiday clubs

Revenue & Customs Brief 18 (2020) clarifies HMRC’s position regarding the VAT treatment of school holiday clubs following the First Tier Tribunal's decision in RSR Sports Limited vs HMRC [2019] TC07450.

Although, The First Tier Tribunal (FTT) accepted that the sports activities (taxable supply) were an important element of the services provided they did not confer with the principal element which was the provision of a holiday camp and therefore the whole supply was a VAT exempt supply of welfare.

Supplies of welfare services are exempt from VAT under Item 9 of Group 7 of Schedule 9 of Value Added Tax Act 1994 where:

Welfare services include those directly connected with the care or protection of children and young persons.

In the case of RSR Sports Limited, it was found that the childcare element was not incidental to and subservient to the activities that were being offered to the parents and children.

Moving forward, other providers supplying such services can similarly exempt their supplies where the facts demonstrate that they qualify and exhibit the key features set out by the FTT in RSR Sports Limited.

If you can meet the following conditions, please do let us know and we can assist your business in reclaiming any historic VAT charged on such supplies.

1. That the body is state-regulated.
2. That the protection and care of children is the predominant activity.
3. Whether the staff have teaching or coaching qualifications.
4. That the staff are acting predominantly as childminders.