Commentary

BB/11/06 VAT—partial exemption – higher education sector variable tuition fees

Part V16 Forms and other HMRC material

BB/11/06 VAT—partial exemption – higher education sector variable tuition fees

BB/11/06 VAT—partial exemption – higher education sector variable tuition fees

Business Brief, Issue 11. 7 August 2006

This Business Brief article concerns the potential detrimental impact of Variable Tuition Fees (VTFs) on the Partial Exemption (PE) methods of Higher Education Institutions (HEIs). Specialist PE terms are explained in HMRC Notice 706 “Partial Exemption” (Part V8).

Background

Many HEIs use a PE special method in which input tax on their overhead costs is apportioned by reference to the value of their taxable and exempt supplies. Such a values-based method is easy to operate, responsive to normal business change, and generally works well provided the

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