Value Added Tax and exemptions
We’re required by HM Revenue & Customs to charge and account for VAT on qualifications sales unless we have proof our customers have eligible body status, in which case sales can qualify for an exemption from VAT.
Similarly, the VAT exemption may apply to commercial training providers, employers and private colleges that receive funding from one of the government agencies.
In accordance with those, rules we're contacting customers requesting confirmation of their eligible body or funding status in order to ensure that VAT is properly charged.
Withdrawal of funding
Further to this, the Skills Funding Agency (SFA) has withdrawn funding of vocational training provided to learners aged 24 and over for non-apprenticeship Level 3 and above qualifications. It will also be withdrawing funding of vocational training provided for learners aged 19 and over for non-apprenticeship qualifications that don't qualify under the new Business Rules.
The effect of these changes is to alter the VAT treatment of the supply of vocational training for these groups of learners, as they no longer qualify for exemption. Therefore, commercial training providers will also need to confirm whether they're delivering fully funded qualifications or a mixture of funded and non-funded qualifications.
Centres delivering Pearson or Pearson EDI qualifications
If you're a centre delivering Pearson or Pearson EDI qualifications that are both funded (for example, by the SFA) which are exempt from VAT, and non-funded (for example, non-apprenticeship level 3 qualifications for learners aged 24 and over) which are subject to VAT at the standard rate, we may need to make some changes to how your centre is set up on our systems.
We'll be in contact to explain any changes and the implications once we've received and processed your reply slip.
If you have registered learners aged 24 and over on non-apprenticeship Level 3 and above qualifications since 1 August 2013, these registrations should have been subject to VAT and we'll be raising VAT only invoices on these registrations to ensure VAT has been properly charged.
Please complete the below reply slip and return it by email to email@example.com or post it to:
Pearson Work Based Learning and Colleges
190 High Holborn
To help you complete the reply slip, please read the HM Revenue & Customs VAT Notice 701/30.
In line with HMRC’s rules, our default position results in VAT being charged and so I would ask for your co-operation in completing and returning this VAT confirmation by 27 February 2015 to ensure that VAT is not charged unnecessarily.
If you have any questions please refer to the FAQs document below.
Alternatively, please feel free to email us at firstname.lastname@example.org.