Research and vocational training

Produced by Tolley
Research and vocational training

The following Value Added Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:

  • Research and vocational training
  • Research
  • VAT treatment
  • Collaborative research
  • Charity or public sector funded research
  • Government grant funded research
  • Supplies to the European Commission
  • Vocational training
  • Government approved vocational training
  • When the VAT exemption is applicable
  • More...

This guidance note provides an overview of the VAT treatment of supplies of research and vocational training.

This should be read in conjunction with the following guidance notes:

  1. Supplies of education

  2. Supplies of goods and services closely related to education


HMRC regards research as including the following from a VAT perspective:

  1. original investigative work undertaken in order to gain, expand or advance knowledge and understanding

  2. developing a particular software programme intended to assist with a particular research project before the main body of the research commences

De Voil Indirect Tax Service V16.1016; VATA 1994 Sch 9, Group 6; VATEDU37000

VAT treatment

If the research is wholly funded by grants, then it will be treated as a non-business activity and the grant money will be outside the scope of VAT.

Prior to 1 August 2013, research undertaken as a business activity was exempt from VAT if it has been undertaken for an eligible body. The UK received a notification from the European Commission that the VAT exemption for business supplies of research between eligible bodies (mainly government departments, schools, universities, charities and other public bodies) does not comply with EU law. As a result of this notification, HMRC withdrew the exemption with effect from 1 August 2013. However, there was a transitional arrangement for supplies of business research where the written contract was entered into before 1 August 2013; whether or not work has already commenced, the exemption continues to apply to services within the scope of that contract. From a VAT perspective, any supplies made under the contract will be treated as a continuous supply of services and the VAT liability of each supply is individually determined and the relevant VAT rules will apply. Please see the Time of supply (tax points) guidance note for more information.

Please note that HMRC has accepted that if there were minor amendments to a contact that was in place before 1 August 2013, this will not affected the VAT exemption applied to

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