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Accountants for education and student recruitment
Student recruitment agencies, training providers and education consultants.
Your commission is not exempt just because education is
This is the assumption that costs money. Education supplied by an eligible body - a university, a college, certain non-profit providers - is exempt from VAT. But a recruitment or consultancy service supplied to that institution is a different supply, and it is generally standard rated.
So an agency introducing students to a UK university is usually making a taxable supply, counts towards the VAT registration threshold, and should be charging VAT once registered. Agencies that assumed otherwise can find they have been trading over the threshold unregistered for years, which is a far more expensive conversation than registering on time.
Where the university is overseas
The place of supply rules change the answer. For a business-to-business service, the supply is generally treated as made where the customer belongs. Commission earned from an institution established outside the UK is therefore usually outside the scope of UK VAT - no VAT charged, though the income still forms part of your turnover and the supply still has to be recorded correctly.
Get this the wrong way round in either direction and you either charge VAT you should not have, or fail to charge VAT you should. Both are correctable, and both are cheaper to get right first.
Agent or principal? It changes your turnover
If you introduce a student and the institution pays you a commission, you are an agent and your turnover is the commission. If you contract with the student yourself, buy the course, and supply it on, you may be acting as principal - and your turnover is the full course fee, with what you pay the institution as a cost.
The difference can be a factor of ten on the turnover line. It decides whether you have crossed the VAT threshold, what your accounts look like to a bank or a UKVI sponsor check, and which company size regime you fall into. It is decided by the contracts and how the money actually moves - not by what is easiest to write down.
When you have actually earned it
Commission is often paid in instalments, tied to the student enrolling, then completing registration, then surviving a refund window - sometimes across two of your accounting years. Recognising it all when the student applies overstates this year and understates the next. We will set a policy that matches your agreements and then keep it consistent, which is what an accruals-basis set of accounts requires.
The rest of it
- Payments to sub-agents and counsellors overseas - deductible, but they need proper records, and if they look like employment there is a PAYE question.
- Clawbacks when a student withdraws and the commission is repaid.
- Foreign currency commission, and which exchange rate you used.
- Companies House and CT600 filing for the trading company.
Institutions and sponsor bodies increasingly ask agencies for filed accounts. Accounts filed late, or showing turnover on the wrong basis, are a poor first impression at exactly the wrong moment. It is worth getting the treatment settled well before anybody asks.
Common questions
Education and student recruitment - the questions we get asked
Do I charge VAT on recruitment commission?
If the institution is in the UK and you are VAT registered, generally yes - your service is recruitment, not education, so the education exemption does not cover it. If the institution is overseas, the supply is usually outside the scope of UK VAT.
Is my turnover the commission or the course fee?
It depends on whether you act as agent or principal, which is decided by your contracts and how the money moves. As agent it is the commission; as principal it is the full fee with the institution's charge as a cost. We will read the agreements before deciding.
When do I recognise commission paid in instalments?
When it is earned under your agreement, not when it arrives. If the instalments depend on enrolment and then completion, they belong to different points. We will set a consistent policy that matches your contracts.