Excessive VAT on Pilot Training

atypical

If lessons became VAT exempt, the training schools wouldn't lower their prices. Do you think driving lessons would become any cheaper if they became VAT exempt tomorrow? I doubt it

I do agree with you though. If education related 'things' are deemed to be VAT free it should be applied consistently.

[Deleted User]

why train for something where supply far far out weighs demand?

Taiko

Basically, the point we are trying to make is to forget any dreams. Dreams cost money.

JasonLVC

The legislation is VERY specific with regard 'Education'.

Education can be exempt when it is provided by an 'eligible body', which are basically not for profit organisations such as schools, colleges, universities or a public body (ie, government body).

So if someone wants to set-up a not-for-profit pilot school then the exemption would apply (in simple terms not for profit means that surplus are not distributed to individuals so this works for a private fee paying school where the board all get a salary and profit is reinvested into the school, but will not work where a Ltd company can freely distribute dividends to whoever they want to).

Also, exempt means that VAT is not charged to the custoemr and VAT is not recoverable on any purchase made by the business. So what you'll end up with is exempt lessons (thus saving £10,400) but the costs for the school will be higher as they'll not be able to reclaim the VAT on the purchase of that Cessna or the repairs costs, landing fees, hanger rental, etc....so as the overheads have now gone up, the cost of the lessons will have to go up....probably by about 17.5%.

This is why exempt services are 'expensive', private schooling, financial services, insurance, banking, funerals - no VAT can be reclaimed by the business, so they pass those costs on to the customer.