§ Mr. Freudasked the Chancellor of the Exchequer if he has any plans to change the treatment of adult education for the purposes of value added tax; and if he will make a statement.
§ Mr. HayhoeI have no such plans. Profit-making adult education courses, other than school or university courses, have always been liable to VAT. Non profit-making education courses are in general relieved from VAT. But courses which include recreational or sporting activities are liable to VAT, unless run by local authorities for fees below the direct cost of putting on the course. The precise definition of recreational activities has given rise to some borderline problems, and this has been the subject of discussions between Customs and Excise and representatives of local authority associations. As a result, jointly agreed guidelines covering this point and explaining more generally the VAT treatment of adult education courses have been issued. The guidelines will enable local authorities and community associations to obtain maximum benefit from the relief provisions in the existing law, as well as providing greater clarity about the liability of particular courses. Copies of the guidelines are available in the Library, or can be obtained from Customs and Excise headquarters in London. The guidelines will take effect from 1 September 1984.