Recreation vs Education
Mistaking a recreational activity for an educational one can be costly. In a recent VAT case, the tribunal found that a belly dancing school’s activities were recreational rather than, as claimed, educational. The class fees should have been subject to VAT at 20% and were not exempt. As the school should have been registered back in 2009, the owner is now faced with a £50,000 VAT liability.
Generally it is only ‘eligible bodies’ such as schools and universities that can make exempt supplies of educational services. This case highlights the need to take appropriate professional advice at an early stage.