Rushby Dance and Fitness Centre & Ors v The Commissioners for HMRC [2025] UKFTT 594 (TC)

[2025] UKFTT 00594 (TC)Case No TC09534
FIRST-TIER TRIBUNAL
TAX CHAMBER
Venue Manchester Tribunal Hearing CentreHearing Heard on: 24 April 2025Date Judgment date: 29 May 2025
Appeal references: TC/2016/04515
TC/2017/04534
TC/2017/06480
TC/2018/00753
VALUE ADDED TAX – exemption for private tuition in a subject ordinarily taught in a school or university – item 2 of group 6 in schedule 9 to Value Added Tax Act 1994 – was tuition provided on own account and at own risk – whether dance and exercise classes ordinarily taught in a school or university
Before
TRIBUNAL JUDGE ROBIN VOSANN CHRISTIAN
Between
RUSHBY DANCE AND FITNESS CENTREAppellantJAGERS DANCE AND EVENTAppellantDANCE CONSULTANTS INTERNATIONAL LLPAppellantKAREN MARIA HILTONAppellantTHE COMMISSIONERS FOR HIS MAJESTY’S REVENUE AND CUSTOMSRespondentRichard Chapman KC instructed by Alan Rashleigh and Associates Limited for AppellantsPaul Marks, litigator of HM Revenue and Customs’ Solicitor’s Office for RespondentsDECISION

Introduction

[1]Each of these four appeals relates to the same exemption from VAT for private tuition in a subject ordinarily taught in a school or university. In each case, HMRC have taken the view that the exemption does not apply and has issued a decision that the appellant in question should be registered for VAT.[2]In the case of the first appellant, Rushby Dance and Fitness Centre (“Rushby”) and the second appellant, Jagers Dance and Event (“Jagers”), HMRC have also issued a VAT assessment and penalty. The present appeals however are only against the VAT registration decisions and do not relate to any VAT penalties or assessments.[3]All four of the appellants provide dance tuition. Rushby and Jagers operate as partnerships. DCI is a limited liability partnership. Mrs Hilton carries on a business on her own account as a sole trader.[4]Although it was directed that all four appeals should be heard together as they all relate to the same VAT exemption, there is in fact no overlap between the issues raised by the appeal made by the third appellant, Dance Consultants International LLP (“DCI”) and the key point at issue in the other three appeals.[5]As far as DCI is concerned, the issue is whether the members of the LLP who were giving the lessons were doing so as private tuition meaning that they were doing so at their own risk and for their own account. In relation to Mrs Hilton, Rushby and Jagers, it is accepted that the dance lessons constituted private tuition (in the case of Rushby and Jagers as long as they were given by partners in the partnerships). HMRC’s view however is that the activities of the various classes do not constitute a subject ordinarily taught in a school or university.[6]We should note that, in his skeleton argument and in his submissions, Mr Marks (representing HMRC) suggested that, in the case of the first three appellants, there was no evidence as to which classes the members of the relevant partnerships had taught and that, on this basis, the classes could not qualify as private tuition given that classes taught by individuals who were not members of the relevant partnerships could not qualify.[7]However, when it was pointed out to Mr Marks that this was not a point raised by HMRC in any of the three statements of case and that, in the statements of case relating to Rushby and Jagers, it was specifically noted that this point was not challenged, Mr Marks accepted that this was not an argument which he could raise at this stage. We therefore say nothing further about it.[8]Both parties invite the Tribunal at this stage only to make a decision in principle as to whether the exemption is available. Based on that decision, the parties anticipate being able to resolve any liabilities between themselves although they wish to be given liberty to apply to the Tribunal for a determination as to the effect of the Tribunal’s decision on the principles should it not prove possible to reach agreement. We indicated that we were happy with this approach.

Late witness statement

[9]Mr Chapman’s skeleton argument on behalf of the appellants, which was filed on 15 April 2025 (five working days before the hearing) contained an application to rely on a further witness statement made by Mr Christopher Rashleigh (a partner in the firm of accountants representing the appellants). Although the witness statement is dated 4 April 2025, it had not, at this stage, been provided either to HMRC or to the Tribunal. HMRC emailed the Tribunal on 17 April 2025 to object to the appellants being allowed to rely on the additional witness statement.[10]On 22 April 2025, the Tribunal directed the appellants to provide the witness statement to the Tribunal and to HMRC by 4pm on that day (which was done) and notified the parties that the application to rely on the witness statement would be dealt with at the start of the hearing.[11]Both parties agreed that, in deciding whether to admit the witness statement, we should apply the three-stage process deriving from Denton v White [2014] EWCA Civ 90 as explained by the Upper Tribunal (in relation to applications for permission to appeal out of time) in Martland v HMRC [2018] UKUT 178 at [44-45].[12]This approach was endorsed by the First-tier Tribunal in W M Morrison Supermarkets PLC v HMRC [2021] UKFTT 0106 (TC) at [42] in relation to an application for evidence to be admitted after the time limit for providing that evidence contained in directions made by the Tribunal. We note that, in applying that test, the Tribunal took into account the comments made by Lightman J in Mobile Export 365 Limited v HMRC [2007] EWHC 1727 (Ch) at [20-21] to the effect that there is a presumption that relevant evidence should be admitted unless there is a compelling reason to the contrary, but that it is not acceptable to spring surprises on opponents at a late stage.[13]The purpose of Mr Rashleigh’s second witness statement is simply to introduce into evidence a number of documents which were exhibited to the witness statement. These documents fall into three categories. The first two categories are historical website pages from the websites of Rushby and Jagers, respectively. The third category constitutes printouts of various resources for teachers and parents to be found on a website known as Twinkl which show that parents and teachers can obtain resources from Twinkl in relation to ballroom and Latin dancing.[14]Mr Chapman accepts that the Tribunal had made directions requiring witness statements to be provided by 31 January 2023, and that there has therefore been a serious delay. He also accepts that there is no good reason for the delay.[15]However, when considering all of the circumstances, he notes that the evidence is relevant to an understanding of exactly what classes were being taught by Rushby and Jagers. He also drew attention to the fact that, it is clear from HMRC’s correspondence that not only had they reviewed the Rushby and Jagers websites, they had also relied on some of the material from those websites in making their VAT registration decisions. On this basis, Mr Chapman submits that there is no material prejudice to HMRC in admitting these first two categories of evidence.[16]As far as the Twinkl documents are concerned, Mr Chapman again submitted that there was no prejudice to HMRC in admitting these documents. In doing so, he made it clear that he could rely on them only as evidence that ballroom and Latin dancing might potentially be taught in schools, given that these materials are available, but that he could not rely on these documents as evidence that those subjects were in fact ordinarily taught in schools.[17]Mr Marks, on behalf of HMRC, made a number of objections to the admission of any of the documents. His main points were as follows:(1) Mr Rashleigh had provided a previous witness statement and so there is no reason why these documents should not have been included as part of that statement.(2) A significant part of HMRC’s case is that the appellants have not provided sufficient evidence of what the classes are in fact teaching and so there is significant prejudice to HMRC in now producing more evidence as to what the classes consist of.(3) In response to one letter in which HMRC referred to the Jagers website, Jagers noted that the website had not been updated for a considerable period of time and therefore cannot be relied on as a current source of information. The evidential value of the Jagers documents, he submits, is therefore questionable.(4) The website extracts appear to date from 2016 whilst the decisions made by HMRC were that Jagers should be registered with effect from May 2010 and Rushby should be registered with effect from January 2012. This mismatch in timing again calls into question the relevance of the website extracts.(5) As far as the Twinkl extracts are concerned, Mr Marks submits that these are irrelevant and that there would be prejudice to HMRC as they have not seen these documents previously and have not therefore had an adequate opportunity to respond to them.[18]Having considered all of the relevant factors, we gave permission for the appellants to rely on the Rushby and Jagers website extracts but not on the Twinkl documents.[19]Although there has been a significant delay in complying with the Tribunal’s direction, for which there is no good reason and, bearing in mind the need for time limits to be respected and for directions to be complied with, we take the view that the fact that HMRC has clearly seen these website documents (or other website documents which are very similar to them) and have referred to them in their correspondence with Rushby and Jagers, including their decision letters, means that there is no prejudice to HMRC in allowing these documents to be admitted as part of the evidence. They are clearly relevant and it will assist the Tribunal and the parties to be able to refer to them.[20]As far as the Twinkl documents are concerned, we agree with Mr Marks that these are of no real assistance. As accepted by Mr Chapman, even if they were admitted, they do not provide any evidence as to whether the relevant subjects were commonly taught in schools or universities. In addition, we also accept that there would be prejudice to HMRC if they were admitted, given that these are documents which HMRC have not previously seen and have not had an opportunity to consider. Given that there has been a significant delay for which there is no good reason, we do not consider it would be right to exercise our discretion to admit this additional evidence at such a late stage.

The VAT exemption for private tuition - legal principles

[21]The exemption for private tuition is contained in item 2 of group 6 in schedule 9 to the Value Added Tax Act 1994, which reads as follows:
“The supply of private tuition, in a subject ordinarily taught in a school or university, by an individual teacher acting independently of an employer.”
[22]The equivalent provision in the Principal VAT Directive (Directive 2006/112/EC) is to be found in Article 132(1)(j). The exemption is for: “tuition given privately by teachers and covering school or university education”.[23]These exemptions have been considered in a number of cases in the First-tier Tribunal but have only been considered once by a higher Court/Tribunal, which was the decision of the Upper Tribunal in HMRC v Cook [2021] UKUT 15 (TCC). That decision is of course binding on us although we should note that there was no significant difference between the parties as to the basic legal principles which should be applied. The dispute is rather about the way in which those principles should be applied to the facts of these particular appeals and also whether those principles can be developed to cater for the circumstances of these appeals.[24]Both parties agree (as did the Upper Tribunal in Cook at [7]) that the exemptions in item 2 of group 6 in schedule 9 to VATA and in Article 132(1)(j) of the Principal VAT Directive are identical in their effect.[25]There is therefore no need for the appellants in this case to rely on the direct effect in UK law of the Principal VAT Directive, although, again, both parties agree that the appellants are entitled to do so, even though the UK is no longer part of the EU. The parties also agree that one consequence of this is that s 6 of the EU Withdrawal Act 2018 is engaged which, generally speaking, means that the effect of the relevant provision should be determined in accordance with EU cases decided before 1 January 2021, and that the Tribunal should have regard to any EU decisions on or after that date.[26]Given that the parties are agreed on this point, and that, in our view, their conclusion cannot be doubted, we will not explain in detail the reasons with this conclusion. We note that Mr Chapman referred to the decision of the Supreme Court in Lipton v BA Cityflyer Limited [2025] AC 154 at [81-87] for an explanation of the relevant principles. We also note that the position is bolstered in relation to VAT by s 28, Finance Act 2024, which provides that, for most purposes, s 4 of the EU Withdrawal Act 2018 continues to apply for VAT purposes, despite its revocation for other purposes by the Retained EU Law (Revocation and Reform) Act 2023.[27]We will focus on the wording of the domestic UK legislation given that it is not suggested that the wording of the exemption set out in the Principal VAT Directive has any different effect. For the purposes of the issues which we need to determine, there are two distinct elements to the exemption:(1) The supply must be one of private tuition by an individual teacher acting independently of an employer; and(2) The tuition must be in a subject ordinarily taught in a school or university.[28]Before exploring the meaning and effect of these two requirements, we note that the CJEU in Werner Haderer v Finanzamt Wilmersdorf (case C-445/ 05) made the following observations at [18] about the predecessors to the exemptions now contained in Article 132 of the Principal VAT Directive:
“The terms used to specify those exemptions are to be interpreted strictly, since they constitute exemptions to the general principle that VAT is to be levied on all services supplied for consideration by a taxable person… Nevertheless, the interpretation of those terms must be consistent with the objectives pursued by those exemptions and comply with the requirements of the principles of fiscal neutrality… Thus, the requirement of strict interpretation does not mean that the terms used to specify the exemptions referred to in Article 13 should be construed in such a way as to deprive the exemptions of their intended effect”
.

Private tuition

[29]Tuition is provided “privately” where it is provided by teachers on their own account and at their own risk (Haderer at [30]).[30]A person who makes themselves available as a teacher in respect of a course offered by another body is not providing tuition privately (Eulitz v Finanzamt Dresden 1 (Case C-473/08) at [52-53]). This is the case, even if the teacher is acting in a self-employed capacity (Eulitz at [47]). In the domestic context, both of these points were confirmed by Henderson J in Marcus Webb v HMRC [2012] UKUT 378 (TCC) at [24].[31]As we have said, this element is relevant only to DCI. The question is whether the members of the LLP who taught classes were doing so on their own account and at their own risk or whether they were doing so on behalf of the LLP as a separate entity.

School or university education

[32]In order to qualify for the exemption, the tuition must be in a subject ordinarily taught in a school or university. As noted in Cook at [7] (and as agreed by the parties in this case), a subject is “ordinarily” taught in a school or university if it is commonly taught in a school or university.[33]The CJEU in Haderer, in response to a suggestion that the ceramics and pottery courses provided by Mr Haderer were intended purely for leisure purposes warned at [24] that, in order to avoid the risk of divergences in the application of the VAT system from one member state to another, a “particularly narrow interpretation” of “school or university education” should be avoided, observing at [26] that:
“The community concept of ‘school or university education’…is not limited only to education which leads to examinations for the purpose of obtaining qualifications or which provides training for the purpose of carrying out a professional or trade activity, but includes other activities which are taught in schools or universities in order to develop pupils’ or students’ knowledge and skills, provided that those activities are not purely recreational.”
[34]It is not necessary that the private tuition in question in some way mirrors or is analogous to the way in which the subject or activity is taught in schools or universities, nor that it is taught to a comparable standard (Cook at [17], approving observations of the Tribunal in Hocking v HMRC [2014] UKFTT 1034 (TC) at [53]).[35]For this purpose, “tuition” involves “the transfer of knowledge and skills between a teacher and pupils or students” (Eulitz at [32]).[36]Mr Marks submitted that the references to “knowledge and skills” in Haderer and Eulitz implies a requirement for the tuition to include a transfer or development of academic knowledge as well as practical skills. In support of this, Mr Marks referred to the decision of the First-tier Tribunal in Cheruvier v HMRC [2014] UKFTT 007 (TC), a case involving belly dancing. The Tribunal noted at [52] that the classroom element of an A-level dance course comprised approximately 50% of the course, concluding at [54] that Ms Cheruvier “does not teach ‘dance’ as such, but one form of dancing only, and that to the limited extent of performance.”[37]In our view, it cannot be inferred from the comments or conclusion of the Tribunal in Cheruvier that a transfer of academic knowledge is a requirement for the tuition in question to be capable of qualifying for the exemption. Rather, the conclusion was that Ms Cheruvier was not teaching “dance” (which it was accepted was commonly taught in schools) as a subject (given the breadth of the syllabus, the fact that only one dance was being taught and the fact that there was no classroom element to the tuition, as opposed to just performance.[38]It is not clear to us that, in referring to “knowledge and skills” the CJEU in Haderer intended to lay down a requirement that both knowledge and skills had to be developed in order for tuition to take place given that they were responding to a suggestion that ceramics and pottery courses were intended purely for leisure purposes (and did not therefore constitute school or university education).[39]Whilst the CJEU left this decision to be made by the national Court, there is no indication that they considered that such courses did not involve tuition on the basis that there was no development or transfer of academic knowledge. Had this been a requirement, it might have been expected that the CJEU would have made the point.[40]In any event, the development or transfer of knowledge and skills will generally go hand in hand. Subjects which are primarily knowledge based will no doubt also develop skills such as critical thinking or research techniques whilst subjects which are primarily practical (including pottery or dancing) will usually require the development or transfer of knowledge of the relevant techniques in order to improve or develop the skills in question.[41]Although the Upper Tribunal in Cook did not specifically deal with this point, we note that in its consideration of the activities in question (the teaching of a form of dance known as Ceroc), the Upper Tribunal rejected at [66(3)] the suggestion that the fact that the classes involved no academic content made them purely recreational. There was no suggestion that the absence of academic content meant that the classes did not, for that reason, constitute tuition.[42]Our conclusion therefore is that tuition need not involve any transfer of academic knowledge.[43]This brings us on to the question as to what features might suggest that an activity is purely recreational, and so does not fall within the concept of “school or university education” in accordance with the decision of the CJEU in Haderer referred to at paragraph [31] above.[44]The Upper Tribunal in Cook notes at [59] that the Advocate General in Haderer referred at [89] to “purely recreational activities of no educational value”. The Upper Tribunal in Cook however warned at [62] that:
“since the ‘purely recreational’ restriction is judge-made, and not contained in the PVD, it is important to avoid interpreting it as if it were a statute.”
[45]One important point made by the Upper Tribunal in Cook at [62(3)] is that, even if a subject, as taught in school, is not purely recreational, it is still necessary to consider whether the private tuition in question is purely recreational and that this must be answered by reference to all of the circumstances of the supply.[46]The Upper Tribunal in Cook, made some comments on various features which were said to lead to the conclusion that the supply in that case was purely recreational. The following points are relevant:(1) An activity can still be purely recreational even though it comprises tuition (paragraph [62(4)]).(2) The motivations of an individual who is receiving tuition are not relevant to the question as to whether the supply is purely recreational (paragraph [66(1)]).(3) The fact that a class might be enjoyable or involve socialising means only that it has a recreational element not that it is “purely recreational” (paragraph [66(2)]).(4) As mentioned above, the absence of academic content does not mean that the activity is purely recreational.[47]Mr Marks made reference to the comment from the Tribunal in Cheruvier at [50] that:
“Most forms of dance (ballroom dancing, Morris dancing, belly dancing, to identify three at random) are inherently recreational, that is, for the enjoyment and satisfaction of the participants (including their satisfaction through performance) rather than for their intellectual development in terms of expanding or deepening their knowledge.”
[48]We should note that the comments of the Upper Tribunal in Cook as to whether the classes in that case were purely recreational were obiter, as the Upper Tribunal had already concluded that the Ceroc classes did not qualify for the exemption as Ceroc was not a subject commonly taught in schools or universities.[49]However, they are nonetheless persuasive and we do not think that the statement in Cheruvier that most forms of dance are inherently recreational can stand in the light of the comments made in Cook, particularly in relation to the absence of any academic content and the motivation of the participants. As the Upper Tribunal noted in Cook, it is necessary to look at all of the circumstances in determining whether the activities in question are purely recreational. This is, in our view, an objective test as it does not depend on the subjective reasons why a particular individual attends the class.[50]Both parties agree that, to qualify for the exemption, the private tuition does not need to cover the whole of a subject taught in schools or universities. It is enough that the private tuition covers a component of that subject. This was clearly the view of the Tribunal in Cheruvier (at [54-55]).[51]It is also in our view implicit in the decision of the Upper Tribunal in Cook that, if there had been evidence that Ceroc was commonly taught in schools as part of a generic dance course, this would be capable of qualifying for the exemption (see, for example at [49]). It is, however, evident that, even in this case, it is necessary to demonstrate that the particular component is commonly taught in schools or universities as part of a wider subject.[52]It is also apparent from Cook that activities which develop generic skills will not qualify for the exemption in the absence of evidence that the particular activity is commonly taught in schools and universities. The Upper Tribunal noted at [44] that the Ceroc syllabus identified various skills applicable to Key Stage 3 targets but concluded at [45] that:
“Organised physical activities (such as the kickboxing in Premier or the belly dancing in Cheruvier) will often develop the same skills, described at this level of abstraction, as activities which are commonly taught in school or university, but that does not tell us whether those organised physical activities are themselves subjects or activities commonly taught in school or university.”
[53]Drawing these threads together, the key principles which we should apply can be summarised as follows:(1) Tuition involves a transfer of knowledge and skills. There does not have to be a transfer of academic knowledge. A transfer of knowledge required to develop the relevant skills is sufficient.(2) It must be shown that the particular activity which is the subject of the private tuition is one which is commonly taught in schools or universities either on its own or as part of a wider subject or course.(3) It is not sufficient that the activity which is the subject of the private tuition develops the same generic skills as activities which are commonly taught in schools or universities if the activity itself is not commonly taught in schools or universities.(4) As long as the activity is commonly taught in schools or universities, it does not have to be taught in the same or a similar way, nor to the same standard.(5) The private tuition does not need to involve exams or lead to a qualification as long as it is not purely recreational.(6) The questions as to whether an activity is purely recreational must be assessed objectively in the light of all the relevant circumstances. For this purpose, the subjective reasons why a person participates in the activity is irrelevant. An activity may be purely recreational even though it involves tuition.

Issues for determination

[54]Based on the principles set out above, the issues which we need to determine in relation to Rushby, Jagers and Mrs Hilton are whether the subject matter of the classes taught is one which is commonly taught in a school or university and, even if it is, whether the classes provided by those three appellants were purely recreational.[55]Given the submissions made by Mr Marks, we also need to determine whether the classes offered by Rushby, Jagers and Mrs Hilton involved “tuition”, being the transfer of knowledge and skills from teacher to student.[56]As far as DCI is concerned, the only issue for determination is whether the classes taught by members of the LLP constituted private tuition in the sense that the members of the LLP were acting for their own account and at their own risk.

The evidence and the facts

[57]The evidence available to the Tribunal consisted of a bundle of documents and correspondence. The bundle contains five witness statements, three on behalf of the appellants and two on behalf of HMRC. In addition, we had Mr Rashleigh’s second witness statement (mentioned above) and the documents exhibited to that witness statement but excluding the printouts from the Twinkl resources which were not admitted as part of the evidence.[58]All of the witness statements were accepted by each of the parties and no party wished to cross-examine the witness of another party. Neither party referred to the evidence contained in the witness statements themselves either in their skeleton arguments or their submissions although reference was made to a number of the documents exhibited to the witness statements provided on behalf of the appellants by Mr Rashleigh, David Rushby and Peter Taylor, the Head Teacher of a primary school in Cheshire.[59]One observation made by Mr Marks is that there is relatively limited evidence as to exactly what was taught in the classes offered by Rushby, Jagers and Mrs Hilton. As we shall see, this is not surprising given the way in which Mr Chapman put his submissions on behalf of the appellants as to whether the activities in question were commonly taught in schools and universities. It has however made it more difficult for us to reach a firm conclusion as to the extent to which some of the classes involved tuition or were purely recreational. We deal with these aspects separately below.[60]Having said this, the relevant background facts are not in dispute and we set out the factual background below. The dispute in reality is how the relevant legal principles should be applied in the circumstances in question.[61]Dance, as a subject, is commonly taught in schools and universities. Mr Rashleigh has produced documents (which we have no reason to doubt and which were not challenged) which showed that 66% of universities in the UK offer courses in dance or other subjects which involve dance and that over 10,000 students took a GCSE in dance in 2016.[62]We have not been provided with any evidence as to the nature of the university courses which involve dance. The parties, instead, focused on the teaching of dance in schools.[63]As far as early years are concerned, the physical education section of the national curriculum shows that, at key stage 1, pupils should be taught to “perform dances using simple movement patterns”. At key stage 2 they should be taught to “perform dances using a range of movement patterns”. Key stage 3 requires pupils to be taught to “perform dances using advanced dance techniques in a range of dance styles and forms”. Key stage 4 refers to pupils being taught “to develop their technique and improve their performance in other competitive sports (for example, athletics and gymnastics) or other physical activities (for example, dance)”.[64]The dance GCSE is wide-ranging, including choreography, performance and appreciation of dance as an art form. It is described as a “holistic engagement with dance”. As far as performing is concerned, students must “participate in and appreciate dance from more than one style” including the performance of “one or more dances which requires an appropriate level of sophistication, complexity and challenge”.[65]The AS and A level requirements are similar although, as would be expected, more advanced. They again involve performance, choreography and appreciation of dance as an art form, in this case to be achieved through “exploring and making connections between theory and practice, critically engaging in the analysis of own work and that of professional repertoire, leading to a holistic approach to the study of the subject”.[66]This includes technical and performance skills which, in the case of the AS level involves “a presentation through both a duet/trio which investigates characteristics of style within a genre and a solo performance of own choreography”. For A level, the pupil is required to perform “a solo based on a specific practitioner demonstrating embodied knowledge of the practitioner’s movement/choreographic style” as well as a performance “as part of an ensemble, through a quartet performance”.[67]We now need to look at the facts relevant to each of the individual appellants.

Rushby

[68]Rushby is a partnership which provides dance and fitness studio dance classes. It offers a large range of different classes both in groups and on a one-to-one basis.[69]Agreement has been reached between Rushby and HMRC as to how most of the classes should be categorised (exempt or standard-rated) for VAT purposes and we need say nothing about those classes. There are however five categories of class offered by Rushby which remain in dispute. These are mostly dance exercise class and are as follows:(1) Kettlercise – this is a form of exercise using kettlebells. In the schedule of classes attached to Mr Rashleigh’s second witness statement, the word “kettlercise” has the registered trademark symbol (®) against it. On the basis of this, we accept Mr Marks’ submission (not challenged by Mr Chapman) that kettlercise is a registered brand name. Kettlercise is described in a letter from Rushby’s agent to HMRC as “an activity which promotes fitness, balance, coordination and other related attributes, which in total permit the student to perform a more active role in life and to benefit from the health-giving properties accruing from the combination of increased self-confidence and personal mental and physical development”.(2) Kettlercise genesis – there is no explanation as to the difference between this and kettlercise and no distinction was drawn between the two by Mr Chapman. We infer therefore that it is similar in its nature and objective to kettlercise.(3) Latin in Line – again, no explanation has been given as to what this involves. Mr Chapman speculated that it involved some form of exercise based on Latin music and/or dance movements. However, we note that, in an agreed schedule of the various different classes offered by Rushby, the justification given for this being exempt from VAT is simply the word “ballroom” which suggests that it may be a dance class rather than a dance exercise class given that the justification for other fitness classes is specifically shown as exercise. Given this evidence, we find on the balance of probabilities that Latin in line falls into the category of dance classes rather than exercise classes.(4) Summer workout – again, this is described as fitness. In the letter from Rushby’s agent to HMRC, it is described as “aerobic dance classes designed to teach dance skills and also to improve fitness through dance”.(5) Ballet active – again, we have no explanation as to what this involves. In the agreed schedule the justification given for this being exempt from VAT is that HMRC have accepted that ballet is exempt. Once more, we have no further information as to what these classes involve although, given the name, it can be inferred that there is an element of fitness/exercise rather than just ballet as a dance form.[70]HMRC issued its registration decision on 26 July 2016, registering Rushby for VAT with effect from 1 January 2012.[71]On 6 February 2019, HMRC issued a VAT assessment for £21,944 for the period 1 January 2012 to 30 November 2014. On 12 February 2019, HMRC assessed a penalty of £4,398.80.[72]As we have already noted, neither of these assessments have been appealed. HMRC however accept that, having agreed that a number of the classes do fall within the exemption for private tuition, these decisions will need to be revisited irrespective of our decision in relation to the classes which remain in dispute.[73]The classes mentioned above are all group classes. As we have mentioned, Rushby also offers one-to-one classes. We were told that HMRC and Rushby have agreed that the treatment of the one-to-one classes should follow the treatment of the group classes. This will be done based on the specific activity for each one-to-one class where this can be ascertained. If the precise nature of any of the one-to-one classes cannot be ascertained, the supplies will be split in proportion to the exempt and standard-rated supplies resulting from the group classes. We do not therefore need to make any separate determination as to whether the one-to-one classes are exempt from VAT.

Jagers

[74]Jagers is also a partnership. From the website material attached to Mr Rashleigh’s second witness statement, it appears that Jagers offers a range of dance and fitness classes.[75]The classes given by Jagers which are in dispute fall into two categories. The first is ballroom and Latin American dancing. The second is classic and modern sequence dancing. In each case, Jagers offers both group classes and private lessons. It is not suggested that there is any difference in the VAT treatment of the group classes and the private lessons.[76]Based on the website extract exhibited to Mr Rashleigh’s second witness statement, the ballroom and Latin American classes involve “extensive instruction” in the relevant dances, “allowing students to become proficient in a range of unique dances”. This involves instruction in “form, posture, footwork and timing”. The lessons are aimed both at students looking to participate in an event or competition as well as those who are just interested in a “fun and interesting new hobby”.[77]As far as the sequence dancing is concerned, the Jagers website states that this is an opportunity to learn social sequence dances and notes the opportunity to participate in a Saturday social dance or a Thursday tea dance so that students can put their “newly acquired sequence dance skills to the test, as well as meet wonderful new friends”.[78]HMRC issued its registration decision on 9 March 2017, registering Jagers for VAT with effect from 1 May 2010. A VAT assessment for £55,571.37 was issued by HMRC on 1 February 2019 relating to the period from 1 May 2010 to 31 March 2017. A penalty of £17,374.51 was assessed on 16 August 2017 although this was reduced to £11,669 on 28 February 2019.[79]It appears that the penalty assessment (but not the VAT assessment) has been appealed but that appeal is separate from the appeal against the registration decision which is the subject of these proceedings.

Mrs Hilton

[80]Mrs Hilton operates on her own and gives ballroom dancing lessons at an advanced level on a one-to-one basis. The VAT treatment of all of Mrs Hilton’s classes is in dispute.[81]The correspondence between Mrs Hilton’s representative and HMRC explains that, as well as the practical teaching, there is a small amount of written work, including the history of certain dance moves and genres. This was not challenged by Mr Marks and so we accept it. However, we note that there is no explanation as to what dance moves or genres are covered by the written work.[82]HMRC’s registration decision in relation to Mrs Hilton was made on 7 December 2017 and registered her for VAT with effect from 1 May 2016. We are told that no assessments or penalties have been issued by HMRC in respect of Mrs Hilton.[83]DCI is a limited liability partnership. The bundle we were provided with contains two different partnership agreements. The first is unsigned and undated although the blank space for the date shows the year as 2016 which suggests that it was produced at some point during 2016. This would make sense as it is stated to have effect from 1 March 2016.[84]The designated members are listed as Ms Jacqueline Wilson and Mr Martin Fallon. There are five other (non-designated) members of the LLP, Susan Haldane, Kristeen Wilkinson, Suzanne Shanks, Ailsa Adams and Diane Watson. As far as profit shares are concerned, the non-designated members are paid an hourly rate for teaching and office based work and some of them also receive a class administration fee which is a weekly or monthly amount. The balance of the profits is split equally between the two designated members.[85]The second LLP agreement is dated 22 February 2017 and effectively supersedes the earlier agreement as it is also treated as taking effect from 1 March 2016. The designated members are the same two individuals. However, there are only three non-designated members, Susan Haldane, Kristeen Wilkinson and Suzanne Shanks.[86]Under the revised agreement, these three non-designated members receive a percentage share of the profits of the LLP being 13%, 8% and 9% respectively until June 2016 and 14%, 9% and 12% thereafter. The balance of the profits are divided equally between the two designated members, as before.[87]The LLP operates four separate dance schools. Ms Wilson is responsible for running one of these schools. Each of the non-designated members runs one of the other three schools. All of the LLP members teach in other branches and provide assistance to the other members where required.[88]The correspondence between DCI’s representative and HMRC notes that the LLP members are responsible for ensuring that the tuition provided in their respective schools is delivered to the standards required of the partnership to enable students to pass exams. Each member is also responsible for the administration of the relevant school.[89]HMRC’s registration decision in relation to DCI was made on 18 April 2017 and required DCI to be registered for VAT with effect from 1 March 2016. As with Mrs Hilton, no VAT assessments or penalty assessments have been issued by HMRC.[90]With that background in mind, we turn now to the issues we need to determine.

DCI – private tuition

[91]The question is whether the members of DCI who taught classes were acting on their own account and at their own risk, independently of an employer.[92]As noted above, we accept that the 2017 LLP agreement is the relevant document on the basis that this has superseded the unsigned and undated 2016 agreement. This was not challenged by Mr Marks on behalf of HMRC.[93]There is no suggestion that the members of the LLP were employees of the LLP. As we have noted, the authorities show that the employment status of the teacher is irrelevant. The question is whether they are providing their services in the context of supplies made by a separate taxable body.[94]In one sense it might be said that partners of a partnership are providing tuition in relation to courses offered by the partnership. However, in the context of an ordinary partnership formed under the Partnership Act 1890, Mr Marks accepted that any tuition provided by the partners is private tuition as that tuition is provided by the partners for their own account and at their own risk as partners in the partnership.[95]In the case of DCI, Mr Marks initially put forward two main reasons why the classes taught by other members of the LLP did not constitute private tuition:(1) The evidence showed that the non-designated members of the LLP were, in effect, responsible to the LLP as a whole so that the effect was as if the LLP was an employer.(2) Although the members of the LLP were entitled to a profit share (and therefore the teaching which each member did had an impact on their remuneration), in order for an individual to be undertaking an activity on their own account and at their own risk, it was necessary for that individual to receive the whole of the fee for the classes which that person taught (less any relevant expenses).[96]Although it might be possible that the position of an LLP is different to that of a general partnership as an LLP has legal personality (and we express no view on this), Mr Marks confirmed that this was not a distinction which HMRC sought to draw in the present proceedings. In the light of this, Mr Marks accepted that, if his points were right, this would mean that classes taught by a partner in a general partnership could not qualify for the private tuition exemption. As HMRC accept that this is not the case, Mr Marks agreed, on behalf of HMRC, that this aspect of their defence to DCI’s appeal should be withdrawn.[97]As a matter of principle, DCI’s appeal against the registration decision therefore succeeds but the parties agreed that the effect of this will need to be discussed between DCI and HMRC taking into account which classes were in fact taught by members of the LLP (as opposed to other individuals) and whether the classes in question relate to activities commonly taught in schools or universities (which, in the case of DCI, was not an issue for determination in this appeal).

Rushby, Jagers and Mrs Hilton

[98]As we have mentioned, there are three issues we need to explore:(1) Whether the activities in question are commonly taught in schools or universities (we will refer only to schools since, as we have mentioned, the teaching of dancing universities was not explored before us).(2) Whether the classes offered by Rushby, Jagers and Mrs Hilton were purely recreational.(3) Whether the classes involve tuition.[99]We will deal with each of these three issues separately but will start with the question as to whether the activities are commonly taught in schools since, if they are not, the question as to whether the classes are purely recreational and/or involve tuition is not relevant.

Commonly taught in schools

[100]It is accepted by HMRC that dance is commonly taught in schools. It is also accepted by Mr Chapman, on behalf of the three relevant appellants, that there is no evidence that the specific forms of dance or exercise which are the subject of the relevant classes are commonly taught in schools.[101]Instead, the appellants’ case is that the range of activities covered by the classes is sufficiently wide that they can be treated as analogous to the generic forms of dance and exercise commonly taught in schools rather than being a specific type or form of dance or exercise which, as accepted by the Upper Tribunal in Cook, requires evidence that that particular type of dance or exercise is commonly taught in schools.[102]Mr Chapman notes that, in Cook, the question identified by the Upper Tribunal at [30-32] was whether the Ceroc dancing classes in question constituted tuition in dance in a generic sense or in a specific form or style of dance. He submits however that there is a continuum between generalised dance (as taught in schools) at one end and a specific dance (such as a waltz) or a specific style or form of dance (such as Ceroc) at the other end and that there comes a point along that continuum where the range of dances taught is sufficiently wide that it should be treated in the same way as generalised dance and therefore as an activity which is commonly taught in schools.[103]Mr Chapman goes on to submit that categories of dance such as ballroom, Latin, classic or modern are all examples of ranges of dance which are sufficiently wide to be treated as analogous to generalised dance rather than a specific style or form of dance. In effect, what Mr Chapman is saying is that anything which is not a specific style or form of dance should be treated in the same way as generalised dance which is taught in schools. He argues that it cannot be the case that private tuition in dancing can only qualify for the exemption if it involves the teaching of all possible forms of dance.[104]In his skeleton argument and in his submissions, Mr Chapman accepted that it is necessary to show that the range of dances in question is taught in schools. However, he suggests that this can be inferred for example from the GCSE syllabus which refers generically to different styles of dance. He went on to suggest that it was enough that the relevant ranges of dance form part of what could be taught in schools so that a lesson which covers different forms of dance should be treated in the same way as dance which is commonly taught in schools.[105]By way of analogy, Mr Chapman suggested that it could be inferred that Shakespeare’s sonnets would commonly be taught in schools as part of an English syllabus and that it would not be necessary to provide specific evidence that this component of an English syllabus was commonly taught in schools.[106]Mr Chapman did not elaborate in his submissions as to how his arguments applied in the context of classes which constituted fitness or exercise as opposed to a range of dances. He noted however that these classes were all based on exercise in the broadest sense and therefore fell within the generic description contained in the relevant national curriculum for physical education.[107]In his response to Mr Chapman’s submissions, Mr Marks observed that it is perfectly possible that each dance lesson offered by the appellants might only cover one dance. As he says, there is little evidence one way or the other in relation to this.[108]However, based on the extracts from the Rushby and Jagers websites and the correspondence with HMRC in respect of Rushby, Jagers and Mrs Hilton, we think it is more likely than not that the lessons in question in fact covered more than one dance. Even if that is not the case, given that the classes are held out as covering a range of dances rather than a single dance, we think it would be necessary to look at any series of classes as a whole rather than focussing on a single lesson just in the same way as, no doubt, a single lesson in a school might cover only one specific aspect of the subject in question.[109]Having said that, Mr Marks’ key submission is that categories such as ballroom, Latin, classic or modern are just as much a form or style of dance as was Ceroc in Cook and that it is therefore necessary to provide evidence that these particular ranges of dances are commonly taught in schools rather than simply treating them in the same way as the generic dance courses which, it is accepted, are commonly taught in schools.[110]As in Cook, Mr Marks points out that there is no evidence that any form of pairs dancing is commonly taught in schools (this not being referred to in the relevant syllabuses/curricula provided to the Tribunal) let alone the particular forms of pairs dancing in question.[111]Mr Marks goes on to submit that, if a single dance does not qualify unless there is evidence that the particular dance is commonly taught in schools, there is no reason why a collection of single dances should qualify without such evidence.[112]As far as classes which are primarily fitness or exercise classes are concerned, Mr Marks submits that these cannot be treated as generic exercise and that, instead, it is necessary for evidence to be provided that the particular form of exercise is commonly taught in schools.[113]We accept, as Mr Chapman suggests, there can be seen to be a continuum in relation to both dance and exercise with, what might be called generalised dance or exercise at one end of the continuum and a specific dance or form or style of dance or exercise at the other end. Private tuition will be capable of qualifying for the exemption if it falls close enough to the generalised end of the continuum to be able to say that the activity, taken as a whole, is one which is commonly taught in schools.[114]However, the precise point at which a line can be drawn is difficult to define. Whether the subject or activity in which the private tuition is given is sufficiently general to be treated as dance or exercise, as commonly taught in schools, is a matter which has to be assessed in each case looking at the range of activities on offer.[115]In this context, as explained in Hocking at [53] and approved by the Upper Tribunal in Cook at [17], it is important to remember that the private tuition does not need to mirror the way in which the subject or activity is taught in schools or for it be analogous to or of a comparable standard to what is commonly taught in schools. However, it must still be a subject or activity which is commonly taught in schools.[116]It is also clear that the private tuition does not need to cover the whole range of activities comprised in a subject which is commonly taught in schools and universities. It can be just a component of that subject or activity (see for example Cheruvier at [54] and Newell v HMRC [2015] UKFTT 535(TC) at [70]).[117]Whilst the Upper Tribunal in Cook focussed on the question as to whether Ceroc was a separate form or style of dance rather than the sort of generalised dance which is commonly taught in schools, in our view the principle which can be derived from that decision is that private tuition in any subject which can be said to be a separate activity in its own right will only qualify for the exemption if it can be shown that the particular activity is commonly taught in schools or universities and that it is not enough that the activity shares characteristics or objectives which form part of the National Curriculum or a particular subject or syllabus.[118]We note for example that the Upper Tribunal refers to Ceroc as a distinct activity at [50(2)]. It also refers to specific physical activities which develop generic skills (giving the example of kickboxing which was the subject of the decision of the First-tier Tribunal in Premier Family Marshall Arts LLP v HMRC [2020] UKFTT 1 (TC) and belly dancing in Cheruvier) and again noting the requirement that there must be evidence that those activities are commonly taught in schools or universities.[119]Although Mr Marks did not put his submissions in quite this way, we consider that this is, in effect, the thrust of his argument that a collection of individual dances such as ballroom or Latin is not sufficiently general that it is the equivalent to dance, as that subject is taught in schools. Instead, it is necessary to show that ballroom or Latin dancing is commonly taught in schools.[120]In Cook, the Upper Tribunal considered in some detail whether Ceroc was a form or style of dance or was a method of teaching generalised dance, the conclusion being that it was a form or style of dance.[121]We do not have the evidence to determine in a similar level of detail whether a category of dance such as ballroom and Latin or classical and modern sequence dancing is, in a technical sense, a form or style of dance although we note Mr Chapman’s submission that (for example), ballroom and Latin dancing constitutes a range of different dances rather than a separate form or style of dance.[122]However, for this purpose, we do not consider that a form or style of dance can be given too technical a meaning. The issue was more complex in Cook given the submission that Ceroc was a particular method of teaching generalised dance. However, there is no suggestion in this case that tuition in the particular categories of dance in question constitute a specific method of teaching dance. Rather, the argument is that the collection of dances covered is sufficiently wide-ranging to be treated in the same way as generalised dance.[123]We cannot however accept this. The GCSE syllabus for example refers to different styles of dance including participation in dance from more than one style. If a pupil chose to participate in a waltz (and we stress that there is no evidence as to whether they might do so) and it was asked what style of dance this represents, the only answer, based on the evidence before us, would be that the style is ballroom.[124]Ballroom and Latin may be two different styles of dance but, even if they are, tuition in two particular styles of dance cannot in our view be said to be equivalent to the subject of dance in the more generic sense used in the National Curriculum for physical education and the syllabuses for GCSE, AS and A Level despite the fact that they encompass a wide range of different individual dances.[125]To use an analogy suggested by Mr Chapman in his submissions, we cannot say that walking into a ballroom and Latin dance class is the same as walking into a dance class in a school or university.[126]Whether or not it is right to treat ballroom and Latin dancing or classical and modern sequence dancing as a particular form or style of dance, based on the evidence available, including the extracts from the Rushby and Jagers websites, we consider that each category of dance is a separate activity in its own right. This is apparent from the fact that separate classes are offered for each category.[127]As such, these activities cannot be treated in the same way as the sort of general dance which is commonly taught in schools in the absence of evidence that the activity is commonly taught in schools as a component of the subject of dance or exercise.[128]In this context, it is not enough that the curriculum or syllabus is capable of including the particular activity in question. Given the generality of the National Curriculum in physical education and the syllabuses for GCSE, AS and A Level dance, we accept that all of the relevant classes could fall within them.[129]However, as is clear from Cook, even if the subject or activity to which the private tuition relates is capable of falling within a particular curriculum or course, there must still be evidence that this subject or activity is in fact commonly taught in schools or universities. In particular, we do not see how it can be inferred that a particular activity is commonly taught in schools just because the syllabus or curriculum is drawn in wide terms which is capable of covering the activity in question.[130]We appreciate that what we have said so far still leaves open the question as to how far along the continuum suggested by Mr Chapman it is necessary to travel before private tuition can be said to relate to the subject of dance as commonly taught in schools or universities. In our view, there is no easy answer to this question as it will depend on the facts of any given case. However, where the tuition relates to a particular dance or style or category of dances, we do not consider that such tuition can qualify unless there is evidence that the dance, category or style is commonly taught in schools.[131]Whilst we note Mr Chapman’s comment about studying Shakespeare’s sonnets in the context of the subject of English, we express no view on this as we do not think it is a helpful analogy given the differences between English as a subject on the one hand and subjects such as physical exercise or dance on the other.[132]Given our conclusions, the ballroom dancing tuition offered by Mrs Hilton cannot qualify for the private tuition exemption as ballroom dancing is a separate activity or style or category of dance where there is no evidence of it being commonly taught in schools or universities as a component of a dance course. Despite the fact that it includes a significant number of different dances, it cannot be treated in the same way as dance as that subject is commonly taught in schools.[133]Similarly, the ballroom and Latin classes and the classical and modern sequence dance classes offered by Jagers do not qualify for the exemption for the same reasons.[134]As far as Rushby is concerned, the Latin in line dance classes also do not qualify for the same reasons.[135]Given that kettlercise has a registered trademark and based on the other evidence as to the nature of those classes, we consider that this is a separate activity in the same way as, for example, zumba or pilates and so, again, cannot qualify for the private tuition exemption in the absence of evidence that it is commonly taught in schools or universities. In particular, it is clear from Cook that the fact that it meets generic targets contained in the National Curriculum for physical education is insufficient, on its own, for a particular form of exercise to qualify.[136]As we have said, we have no evidence as to exactly what is involved for Ballet Active. However the inference is that it is a particular form of exercise involving ballet moves. Again, in the absence of any evidence that this particular form of exercise is commonly taught in schools, we cannot accept that this qualifies for the private tuition exemption.[137]The position in relation to the summer work-out classes is more finely balanced. It might be said to be more general exercise but there is also a specific dance element, the description being “aerobic dance classes designed to teach dance skills and also to improve fitness through dance”.[138]As we have seen, the National Curriculum for physical education includes dance as a physical activity and so it might be said that a generic aerobic dance class might qualify as tuition in a subject commonly taught in schools. However, on balance, we do not consider that we have enough evidence as to what is involved in the summer work out classes, nor the way in which dance might be taught in schools as part of physical education to be persuaded that these classes qualify for the exemption.[139]Having decided that the tuition in question is not in subjects or activities which are commonly taught in schools or universities, strictly speaking, we do not need to consider whether the classes are purely recreational or, indeed, whether the classes in fact involve tuition. However, as both of these points were argued before us, we will deal with the points briefly.

Purely recreational

[140]In submitting that the classes are purely recreational, Mr Marks relies heavily on the comments made by the Tribunal at [50] in Cheruvier reproduced at [47] above to the effect that most forms of dance are inherently recreational. Mr Marks submits that this is particularly the case where the classes relate only to performance rather than having any academic content.[141]Mr Marks did accept that, if the classes were, for example, with a view to competing in a competition or obtaining an award, they may not be purely recreational, although suggested that, in these circumstances, the classes would not relate to a subject taught in schools or universities.[142]On this latter point, we cannot see that the question as to whether the classes are taken with the intention of participating in an event or competing or with a view to obtaining an award can have any bearing as to whether the subject or activity is one which is commonly taught in schools or universities. As was made clear in Haderer, private tuition can qualify for the exemption whether or not those classes lead to examinations or qualifications or are with a view to carrying on a professional activity.[143]If there were evidence that, for example, ballroom and Latin dancing was commonly taught in schools (but not with a view to participating in competitions), we cannot see why private tuition in ballroom and Latin dancing with a view to participation in a competition would not qualify for the exemption.[144]Mr Chapman did not make any detailed submissions on the question as to whether the classes were purely recreational although did refer to the guidance provided by the Upper Tribunal in Cook.[145]As we have said, bearing in mind the comments made by the Upper Tribunal in Cook, we do not agree that private tuition in particular categories or styles of dance is inherently recreational. We do not think that this is a helpful term as, in our view, the nature and purpose of the classes needs to be examined and there can be no presumption that a class is inherently recreational simply because the activity involved is dancing.[146]Looking first at the tuition provided by Mrs Hilton, it is clear that this is at a high level, the evidence being that Mrs Hilton only teaches students who have already gained a dance qualification and that she also teaches individuals intending to participate in ballroom dancing competitions or for the purposes of vocational training. There is no suggestion that there is any recreational element to the tuition which she provides. We are satisfied that the tuition provided by Mrs Hilton is not purely recreational. In addition, the classes involve a small amount of written work relating to the history of certain dance moves and genres.[147]Turning to Jagers, the extracts from their website suggest that the focus of the classes is on teaching the participants to perform particular dances or categories of dance. It is also acknowledged that this teaching could have a number of purposes including participating in an event or competition or just as an interesting hobby. There is also a social side as students are able to practise their skills at a Saturday social dance or a Thursday tea dance.[148]As explained by the Upper Tribunal in Cook at [66], the motivation of the participants in the classes is irrelevant. This must be right as different participants will have different motivations. For some, their purpose in attending the class may be purely recreational in order to meet people and have a good time. For others, the desire to become proficient may be competitive.[149]In the light of this, as we have said, the focus must be on the nature and purpose of the class itself.[150]It is clear to us from the Jagers website material that the main focus of the classes in question is teaching people to become proficient in particular dances. There may be a social side to it in that people are encouraged to have fun and to participate in other social activities such as the tea dances but, as observed by the Upper Tribunal in Cook at [66], the fact that a class is enjoyable or has a social element does not mean that it is purely recreational.[151]We have no evidence as to whether there was a particular structure to the teaching which took place in the classes or whether there was a set course of study. Nor do we know whether all or any of the classes were designed to lead to any sort of award or qualification. However, the absence of these features does not mean that the classes are purely recreational, as is made clear in Haderer at [26] and Cook at [66].[152]Given the clear focus on tuition, our view is that the classes provided by Jagers are not purely recreational.[153]As we have said, we have less information about the nature and purpose of the classes provided by Rushby. Both types of kettlercise classes, the summer workout class and the ballet active class appear to be fitness/exercise classes whilst the Latin in line class we have found to be a dance rather than exercise class.[154]We have some information about the nature of the kettlercise and summer workout classes. Although it appears that there is some tuition, particularly in relation to kettlercise given the use of kettlebells, the limited information available to us suggests that the focus is on exercise rather than tuition and that this is the purpose of the classes.[155]Although it is said that the effect of the classes is to “permit the student to perform a more active role in life and to benefit from the health-giving properties accruing from the combination of increased self-confidence and personal mental and physical development”, we see this as a possible consequence rather than a purpose of the classes, the main purpose being exercise and fitness. Our conclusion in relation to the kettlercise and summer workout classes therefore is that they are purely recreational.[156]We simply do not have the evidence in order to be able to reach a conclusion as to whether the Latin in line and ballet active classes are purely recreational as no evidence has been provided as to what those classes involve.[157]We suspect it is likely that the main focus of the Latin in line classes is tuition in particular dance moves whilst the focus of the ballet active classes may well be fitness but with some tuition in relation to ballet moves. It might therefore be that neither of these classes are purely recreational. However, we cannot make a factual finding in the absence of any evidence.[158]Had we needed to decide this point, we would have been forced to conclude that Rushby (which bears the burden of proof that it falls within the exemption) has not satisfied us that the classes are not purely recreational.[159]The result in relation to Rushby would therefore be that, even if the classes in dispute involved activities commonly taught in schools or universities, those activities would be purely recreational and would not therefore fall within the exemption.

Tuition

[160]As we have seen, for this purpose, tuition involves a transfer of knowledge and skills (Eulitz at [32]). For the reasons explained above, we have rejected Mr Marks’ submission that this implies that there must be a transfer of academic knowledge.[161]On this basis, we are satisfied that the classes offered by Jagers and Mrs Hilton qualify as tuition. Although the main focus is on performance of the relevant dances, we fail to see how those skills can be developed without a transfer of knowledge of the relevant steps and techniques.[162]As with the question as to whether the classes in dispute which are offered by Rushby are purely recreational, the determination as to whether those classes involve tuition suffers from the lack of evidence as to the precise nature of the classes.[163]The brief description of kettlercise contained in the correspondence with HMRC makes no reference to teaching and refers only to the student engaging in an activity. We infer that there is some transfer of knowledge and skills in how to use the kettlebells but, as confirmed in the correspondence, “the common aim is simply to improve fitness and awareness levels in the student”. On balance, our conclusion is that, whilst there may be a small element of tuition involved in the classes, this is not sufficiently significant that the classes as a whole can be said to involve tuition for the purposes of the exemption.[164]The summer workout classes are designed to teach dance skills and to improve fitness through dance. Again, it appears that the focus is on fitness (which is why we have concluded that the classes are purely recreational) but, based on the limited evidence we have, we accept that the teaching of dance skills is an integral part of the exercise. As this involves the transfer of knowledge and skills, we accept that the summer workout classes involve tuition in the relevant sense.[165]As we have said, we have no evidence at all about what is involved in the Latin in line and ballet active classes. However, we think it can be inferred from the references to Latin and ballet that there is a significant element of teaching in relation to those disciplines which would involve the transfer of both knowledge and skills and which therefore qualifies as tuition.

Decision

[166]In relation to DCI, the classes taught by the members of the LLP are on their own account and at their own risk. Subject to satisfying the other requirements, these classes therefore potentially fall within the exemption from VAT contained in paragraph 2 of group 6 to schedule 9 VATA.[167]None of the classes in dispute offered by Rushby, Jagers and Mrs Hilton are in a subject which is ordinarily taught in schools or universities and the supplies are therefore standard rated as they do not qualify for the exemption in paragraph 2 of group 6 to schedule 9 VATA.[168]The appellants and HMRC will need to discuss the implications of the conclusions which we have reached in relation to the decisions made by HMRC. As indicated by the parties, we would expect that they would be able to reach agreement on these matters. However, any party has liberty to apply to the Tribunal for a determination of any relevant matter should no agreement be reached.

Right to apply for permission to appeal

[169]This document contains full findings of fact and reasons for the decision. Any party dissatisfied with this decision has a right to apply for permission to appeal against it pursuant to Rule 39 of the Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009. The application must be received by this Tribunal not later than 56 days after this decision is sent to that party. The parties are referred to “Guidance to accompany a Decision from the First-tier Tribunal (Tax Chamber)” which accompanies and forms part of this decision notice. Release date: 29th MAY 2025

Cited in 1 later judgment