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What is the definition of a student

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The VAT People - Expert Author

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13th February 2014

Well… I am sure that your position differs depending on whether you were or weren’t a student! however… casting this aside… HMRC have announced new guidance on the definition of the term in relation to the VAT reliefs available for buildings used for a ‘relevant residential purposes’.

As you may be aware, there is a VAT relief available for construction services in relation to new buildings that are used for a relevant residential purpose; and in this case relevant residential purpose includes student accommodation.

HMRC have stated that in some cases taxpayers have misinterpreted the definition of ‘student’ and this has meant that the relief has been incorrectly applied.

They have stated that the ambiguity often arises in relation to summer schools, residential events and academic conferences.

HMRC have acknowledged that many people attend classes that are badged as 'summer schools', and have stated that if the subject matter falls into the category of hobbies or leisure interests (for example pottery workshops, art or literature appreciation courses etc.) as opposed to receiving educational or vocational training to an academic standard, the attendees will not qualify as 'students'.

The guidance in this area is again unnecessarily complex and in our view does appear to raise more questions than answers. It is difficult to apply many of the VAT reliefs already without having to over analyse who is and who isn’t a student.

We continue to recommend seeking professional advice if you or your client is engaging in construction projects. There are many VAT reliefs available and all have very specific conditions that must be satisfied, given the significant values involved and the potential for irrecoverable VAT and penalties if errors are made, it is of the utmost importance to ensure that the rules are correctly applied.

For your information, Business Brief 03/14 announces the new guidance which is contained at VCONST15360.


About the Author

The VAT People are leading VAT and Customs Duty consultants based in the North West of England. We work with a wide range of businesses throughout the UK as well as assisting our accountancy colleagues to unravel the thorny VAT issues for their clients. We are one of the UK's largest and most comprehensive sources of VAT and Customs advice, our consultancy team having over 140 years of experience in VAT and Customs gained in either HMRC or a Big 4 accountancy practice environment.

Call us on our VAT helpline 0800 077 4604 to discuss. All initial discussions are free with no-obligation.



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Article Published/Sorted/Amended on Scopulus 2014-02-20 08:08:37 in Tax Articles

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