VAT treatment of vocational training

Revenue has now issued detailed guidance regarding the exemption from VAT of education and vocational training following a number of queries they received in relation to the legislation changes in 2015.

The updated legislation provides for the continued exemption of such education, vocational training or retraining where it is provided by a recognised body. The definition of a recognised body caused some confusion to providers of vocational training as it appeared to make it more difficult for private sector training or conference providers to continue to qualify for the exemption from VAT on their services.

Vocational training or retraining encompasses any training relating directly to a trade or profession given to a person in order to improve their ability to carry out their work or to prepare trainees for future employment.

Revenue have now confirmed that vocational training and retraining services continue to be exempt from VAT where each of the following conditions are met:

1. It must be vocational in nature which means it must be directed towards an occupation and its associated skills
2. It must be provided to improve the vocational rather than the personal skills of the trainee
3. The vocational skills that the trainee acquires can be transferable from one employment to another, or to self-employment
4. The training will generally be provided by means of a structured programme, have concise aims, objectives and clear anticipated outcomes
5. There should be a clear trainee/trainer relationship between the student and the teacher or instructor

Where any of the above conditions are not met or the course is primarily directed towards personal development or undertaken for recreational purposes, the course will be subject to VAT at the appropriate rate.

Revenue go on to provide examples of VAT exempt training including the following:

• Training provided to trainee chefs in a cookery school
• Payroll training to payroll operators in a company
• Anti-money laundering training to employees
• Software training

Conferences
The admission charge to conferences will generally be subject to VAT however they may be regarded as coming within the scope of the education and vocational training in the following circumstances:

• The conference is organized and held by a recognised body and he purpose of the conference is to provide education to participants
• The purpose of the conference is to provide vocational training or retraining to participants

For any additional information or help contact our tax team.