Tax

Tax

Tax for Tutors and Tuition Companies

It is a requirement of membership that TTA members comply with tax legislation and pay tax on their activities where they are required to do so.
 
The main taxes that are likely to apply to TTA members include:
  • Private tuition that is delivered by self-employed tutors (who are either a sole trader or member of a partnership) in subjects ordinarily taught in schools or universities are not subject to VAT as private tuition is exempt from VAT. However, any tuition provided by any other tutors you take on would be subject to VAT at the standard rate. Where a tutor registers a limited company and provides tuition through this company, VAT will apply (even if the company is a Personal Service Company or ‘PSC’ and the tutor is the sole director and shareholder). 
  • Tuition companies with revenue over the VAT threshold of £90K per annum must register for VAT. Tuition companies operating as an employment business (EB) must charge VAT at the standard rate on the entire value of tuition provided, whereas employment agencies (EA) will only receive their commission as revenue and are not permitted to accept the payments due to the tutor and pass them on; accordingly, under the EA model, VAT only applies to the EA’s direct revenue (i.e. commission) and so the total VAT cost to the customer is likely to be much reduced where tutors ordinarily would not be liable for VAT.
  • HMRC publish detailed guidance on GOV.UK. For HMRC specific guidance on VAT treatment of Education, research and vocational training refer to Education and vocational training (VAT Notice 701/30) . To gain a better understanding of VAT generally, refer to When to register for VAT and you can check what VAT registration might mean for you by using the ‘VAT registration estimator’.
  • For more details on EB and EA models, please go to our page on legal compliance.
  • Tuition companies that employ any staff (whether that is tutors or administrative staff) will need to register for PAYE (“Pay As You Earn”). You would need to ensure that you correctly declare, calculate and deduct taxes from employee’s wages. You may wish to use accounting software or an accountant to assist you with this; these services are widely available.
  • Any company is required to pay corporation tax on its profits. We recommend you speak to your accountant to plan for any corporation tax liability and see if there are ways in which you are entitled to reduce any such liability.
Filing a tax return with HMRC

If you receive income for tutoring services, you may need to tell HMRC about this income via a tax return.​

If you haven’t filed a tax return before, you’ll need to register for Self-Assessment as soon as possible. Go to HMRC’s interactive guidance on Gov.UK  around additional income, for more information.

Additionally, please refer to the following YouTube video playlists for more specific guidance.

Self-employed tax returns

Watch a collection of videos to find out about self-employed tax returns.

You’ll learn about:

  • basic record keeping
  • your self-employed tax return
  • cash basis and simplified expenses
  • what expensed you can include in your Self Assessment tax return
  • claiming motoring expenses calculating your business expenses for rent, rates power and insurance costs
  • other allowable business expenses
  • Class 2 National Insurance contributions

Self Assessment tax bills

Watch a collection of videos to find out about Self Assessment tax bills.

You’ll learn about:

  • viewing your Self Assessment tax return calculation
  • budgeting for your Self Assessment tax bill
  • paying your Self Assessment tax bill
  • using the HMRC app to make a Self Assessment payment
  • help if you cannot pay your tax bill
  • Self Assessment penalties
  • appealing a late filing penalty