Revenue & Customs Brief 18 (2020): ‘VAT liability of school holiday clubs’ clarifies HMRC’s position on the VAT treatment of school holiday clubs following the First Tier Tribunal's decision in RSR Sports Limited vs HMRC [2019] TC07450.

In RSR Sports Limited vs HMRC [2019] TC07450, the First Tier Tribunal (FTT) found that the provision of a holiday camp was a VAT exempt supply of welfare, even though taxable sports activities were an important element of the services provided.

Supplies of welfare services are exempt from VAT under Item 9 of Group 7 of Schedule 9 of Value Added Tax Act 1994 where:

  • The supply is by a charity, a state-regulated private welfare institution or agency or a public body.
  • The services are welfare services and goods supplied in connection with those welfare services.

Welfare services include those directly connected with the care or protection of children and young persons.

In the case of RSR Sports Limited, the childcare element was not incidental to and subservient to the activities that were being offered to the parents and children.

Other providers supplying such services can similarly exempt their supplies where the facts demonstrate that they qualify and exhibit the key features set out by the FTT in RSR Sports Limited.

HMRC will consider properly evidenced requests for the correction of incorrect rulings:

  • After an initial review, HMRC may ask for more information to ensure that the conditions above are fully satisfied.
  • Evidence will be required to show:
    • That the body is state-regulated.
    • That the protection and care of children is the predominant activity.
    • Whether the staff have teaching or coaching qualifications.
    • That the staff are acting predominantly as childminders.

Where taxpayers have a current appeal before the FTT, any Tribunal reference numbers must be given.

When seeking a written ruling, quote reference RCB 18 (2020).

Businesses that have accounted for too much VAT may correct this by following the normal VAT error correction procedure.

External link 

Revenue & Customs Brief 18 (2020): ‘VAT liability of school holiday clubs’