Although a lot has been discussed over VAT since I last reported on it (quodlibs 191) little definitive has happened (or, at least, little that has reached me).    And while some of the points below are not much more than rumours (or, at best, second- or third-hand comments from undisclosed providers), nevertheless I pass them on in case they are of use.

a) There is a widespread view that 17.5% on dl courses may be inevitable, though whether than is driven by a general pessimist within the sector over VAT, rather than a realistic appraisal, is open to question.

b) The view that HMRC are looking, in the long term, to phase out all mixed supply rulings persists, though it may not be realizable in our lifetimes.

c) On the other hand, several providers have reported that they had (proactively) told HMRC they proposed to continue with their mixed supply arrangements, and had not had an adverse reaction from HMRC.    Indeed, there are stories that in a few cases local offices have re-confirmed mixed supply rulings within the past few months.    Perhaps even HMRC officers hanker after an easy life, or just resent being told what to do by head office.

d) Then again, the main fear for some providers is not that courses will be taxed in future, but that tax may be imposed retrospectively.    There is even a rumour (and I stress it is no more than that) that HMRC might seek to go back more than three years.    Such a move may be very unlikely, and grossly unfair, but the advisers I have spoken to won’t rule it out.

e) One suggestion doing the rounds is that providers offering courses which lead to externally-accredited qualifications are more likely to be treated as educational (and hence taxable) whereas those offering their own qualification which is not externally blessed (or no qualification at all) might be able to convince HMRC that they are in the materials supply business (and hence zero-ratable).

f) Then again, strong resistance to zero rating from HMRC in at least one case has been encountered, and may yet go to court.

g) There are also suggestions that the original HoL judgement is not watertight, and may yet be challengeable in some way or another:   that “the CEM case was not properly considered by the House of Lords and that the "tabletop" approach had been overlooked.”    If and where and when it might be challengeable, however, is not clear to me.

h) Some providers (I know of two, both medium/large) are talking of acquiescing and moving more or less at once to a fully taxable regime, both charging and paying VAT as from 1 April, and putting up their prices, whatever happens elsewhere.    A few are considering a fight, and whilst no clear champion has emerged from the pack as yet, a few tentative offers have been made.

On the other hand, I know that ABCC, which is, after all, the nearest thing there is to a trade body for distance learning and therefore the one that might be expected to coordinate concerted action, has effectively decided not to do so, at least so far.