SALE OF LAPTOP COMPUTERS TO PUPILS

In the e-courier of 27 October, 2006 I referred to advertising material that I thought might be misleading about sales to pupils without charging VAT.

Her Majesty's Revenue and Customs have now clarified the position.

An LA school can treat the goods and services it supplies to its pupils as non-business if they are closely related to the non-business provision of education. In order for this to happen the following conditions must be satisfied:

the specific goods or services purchased are for the direct use of pupils in lessons during LA supervised tuition.

in the delivery of the education that is part of the curriculum, and

are necessary for delivering that education

For avoidance of doubt it is not enough that a similar item is used in LA tuition whilst the purchased item is used elsewhere, eg at home for homework or musical practice.

Taking the case of laptop computers and applying these rules it is the view that the only way they could possibly qualify for treatment as items closely related to education is if they are used by the students in lessons as a necessary part of receiving tuition from a teacher. Use of the item for homework, for example, does not meet these requirements.