In addition to the main supply of education, exemption is also available for income received from supplies which are closely related to the supply of education and which are supplied either:
- directly to the student; or
- to another University
The term closely related generally refers only to goods and services that are for the direct use of the pupil, student or trainee and necessary for delivering the education to that person. This includes, for those attending the University or participating in a course, conference or seminar:
- any accommodation
- the photocopying of course materials
- supply of exam calculators
- charges for the use of computers by a student
However, there are some areas where the exemption does not apply. For example, alcohol is not seen as being a closely related supply. A charge for attending a conference which includes a meal may well have a VATable element which relates to the wine served at the meal.
There are also some areas where the exemption cannot be applied because it does not fall within the rules even though the ultimate beneficiary of the sale may be a student.
- A charge to a lecturer (rather than the lecturer's institution) for photocopying lecture notes cannot be exempted because although the notes will be used by the students, the lecturer is not another University, College or School.
- A charge to another University, College or School for a lecturer's use of a computer cannot be exempted because the user is a lecturer not a student.
Also if the University were to charge a student for something that was not related to their education this would be VATable.