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Colleges assured of tax-free status

Customs and Excise officials moved this week to quell the row over tax on education, insisting there would be no VAT on course fees.

Earlier this month, The TES revealed that the Snowdonia National Park Study Centre had been told to pay VAT and the Abernathy School Outdoor Centre in Inverness-shire had been refused exemption.

But a Customs and Excise spokeswoman, insisted this week there had been no change in policy and that courses at other colleges would remain free of VAT.

She said: "There's no VAT on courses to be provided by eligible bodies. There's no change in the legislation. If someone is at an eligible body, which is people like local authorities or the national parks, eligible courses remain VAT-exempt."

Educational organisations may have to pay VAT on materials such as pencils or computers, she said, but many would be able to reclaim the tax through their commercial activities.

The Snowdonia case highlighted concerns that VAT officials were exploiting the wording of the VAT (Education) Order, 1994, which was designed to prevent VAT being levied on all courses not run exclusively for profit.

Adult education leaders feared the order had been re-interpreted to impose VAT on any non-statutory course, on the grounds that it was being run as a business.

But this week VAT officials said there had been no shift, arguing, "There has been no change in the situation; this is how it has always stood."

Alan Tuckett, director of the National Institute for Adult Continuing Education, welcomed the clarification, but said vigilance was needed to prevent action by local VAT offices.

He said: "It's excellent news that courses offered by educational bodies are not going to attract VAT, although it does seem to contradict the stance taken over Snowdonia.

"The worry we have is that local VAT offices do not seem to have a clear enough understanding that education is other than a business activity.

"If we want to create a learning society, we should be rewarding people for investing in learning."

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