Tranter (t/a Dynamic Yoga)
| Jurisdiction | UK Non-devolved |
| Judgment Date | 15 October 2014 |
| Neutral Citation | [2014] UKFTT 959 (TC) |
| Date | 15 October 2014 |
| Court | First-tier Tribunal (Tax Chamber) |
[2014] UKFTT 959 (TC)
Judge Swami Raghavan; Ms Helen Myerscough
John McCabe and Douglas Cully of Coastal Tax and Accountancy for the Appellant
Erika Carroll and Lynne Ratnett, HMRC officers for the Respondents
VAT - Exempt supplies - Supply of private tuition by an individual teacher acting independently - Tuition in yoga - Whether tuition in a subject ordinarily taught in a school or university - No - Supplies of tuition services chargeable to VAT - Value Added Tax Act 1994 schedule 9 group 6VATA 1994, Sch. 9, Grp. 6, Item 2 - Appeal dismissed.
[1]The appellant runs a yoga studio at which a number of instructors, including the appellant teach yoga. HMRC made a decision that the appellant's tuition in yoga is not a supply of tuition "in a subject ordinarily taught in schools or universities" and that it was not therefore exempt under Value Added Tax Act 1994 schedule 9 group 6item 2, Group 6, Schedule 9 of the Value Added Tax Act 1994 ("VATA 1994"). The appellant's appeal is against that decision.
[2]The appellant argues his supplies of yoga meet the statutory definition. Yoga is taught in a large number of schools and universities and the yoga taught there corresponds to the yoga taught by the appellant.
[3]HMRC disagree. Yoga is not educational but recreational. It is not a subject which is ordinarily taught in schools or universities and, in any case, to the extent yoga is practised in certain schools, the aims and objectives of the yoga as taught by the appellant and the environment in which he teaches it differ significantly.
[4]We heard oral evidence from the appellant which was subject to cross- examination. The Tribunal also had the opportunity to ask questions. The appellant was a credible witness. In addition we had before us two bundles of documents containing correspondence between the parties and which included materials from various schools, colleges and a university relating to yoga, details of the assessment and subject matter relating to the GCSE in Physical Education which mentioned yoga, a survey carried out on attendees at the yoga studio, and information provided on the appellant's website.
[5]Mr Tranter is a full time yoga teacher and has been doing this for the last 18 years. The level of student he teaches ranges from complete beginners through to the advanced yogi student. The age of those he teaches ranges from 8 years to those in their eighties.
[6]He is extremely passionate about the subject. He started off in a church hall. Five years ago he started to train teachers. Now he has a large studio open 7 days a week. He tries to promote a relaxed, laid back atmosphere with fun. As part of the classes he talks about health aspects of yoga to make students aware of the importance of moderation. In the course of his classes he also talks to students about the origins of yoga.
[7]Yoga consists of eight "limbs" (to use the term that Mr Tranter used). The lower (physical) four are essential to the higher four (which included meditation, concentration and "samadai", meaning oneness with universe and god and everyone in the world).
[8]There are different types of yoga. Mr Tranter teaches the type of yoga known as hatha yoga. This covers physical yoga. There are many styles of hatha yoga e.g. bikram, iyengar, and ashtanga yoga.
[9]In the classes he teaches in the yoga studio he teaches different postures to cater for different abilities. So he would show a modified posture to students who were beginners. During the class he teaches and talks throughout. He physically demonstrates the posture. He walks around looking at each student individually to makes sure the postures are safe, that they are not overworking themselves and to encourage people who are more advanced to push themselves. He explains the benefits of each posture. These have names such as "mountain", "boat", "tree" and "warrior".
[10]We saw a manual of various postures, "the Dynamic Hot Yoga Teaching Manual". This contained diagrams with the Sanskrit name, the English name, figures showing the posture, with annotations and a section on benefits. The manual was used for teacher training classes but as at the date of the hearing Mr Tranter was not running any separate yoga teacher training classes. While he has in the past taught teachers, and while the classes he teaches at the studio include within them some yoga students who are interested in becoming yoga teachers, the classes do not cover the teaching of how to teach yoga to others.
[11]The studio is heated to above normal room temperature (98 degrees Fahrenheit - a temperature similar to that of human blood). Heat is a vital part of yoga. It loosens up the muscles and increases the benefit to the circulation system.
[12]Mr Tranter says his teaching opens the musculature of the body. He described the benefits of yoga as being about developing strength and balance, general improvement of health and awareness of body, improving discipline, determination and patience. In his experience it could make people more confident. At a higher level yoga also encompassed spirituality.
[13]He teaches around 75% of the classes at the studio. This comes to about about 16/17 classes a week. The classes are 90 minutes long and take place, at 10am, 12pm, 6pm and 10pm. He teaches both weekdays and weekends, but tries to have one day off per week. The typical class size is about 27 (the maximum being 50/60) and contains a mix of abilities.
[14]When students start they can do a three week trial at a discounted rate. They can do pay as you go classes, but there is also a card system which enables them to come regularly and save money. There are around 90 students enrolled in regular direct debit membership.
[15]There is no published syllabus. No formal qualifications are required to become a yoga teacher apart from experience.
[16]A survey was conducted amongst students at the studio on 9 September 2013. The sample size was of 94 students, and was taken from three classes in one day. The survey was stated to be on the benefits of yoga and invited the respondents to tick boxes which applied on various benefits such as improved concentration, energy, strength, balance, intelligence, health/body awareness, discipline, determination, patience, relaxation, well-being, self-esteem and confidence. There were also boxes which could be ticked for the following statements: "I am interested in the spiritual aspects of Yoga", "I studied Yoga at school", "I am studying a course in Yoga elsewhere", "I wish to be Yoga teacher and am gaining the practical experience." Two of the students say they studied it at school. Ten stated they wished to be yoga teachers.
[17]The survey also included a section inviting respondents to explain in a few words how Yoga had helped them and any other benefits not noted in the previous section. In broad terms the respondents who answered referred variously to physical improvements in flexibility, muscle relaxation, body shape and assistance with previous medical or sporting injuries. They also referred to feeling relaxed, balanced, and having better mental well-being and positivity.
[18]The appellant referred us to various documents relating to the provision of yoga in schools, colleges and a university.
[19]We were referred to a news article on the BBC website "Scottish children feel benefits of yoga". This referred to collaboration between a charity (Patanajli Yog Peeth UK Trust) and Glasgow City council in teaching yoga in schools. The article refers to 15 schools in the city being involved so far and describes the scheme as involving Mr Poadda (of the charity) giving a taster lesson to pupils and then inviting teachers to free training so they can deliver the yoga classes without him.
[20]In relation to Sevenoaks primary school we saw a letter from the Year 3 teachers dated May 2012 which informed parent and carers that the school as part of providing wide range of sporting activities was offering yoga through Yoga for Kids at a cost of £4 per child. The letter stated:
Yoga for Kids classes include modified yoga postures, co-operative games, creative stories, brain gym and music. Yoga can help children become aware of their own body, breath and mind. It can enhance their ability to relax and unwind, lengthen and tone muscles, increase metabolism and help them enjoy life!
[21]The prospectus of Holbrook school for 2011 mentions that the main hall is used for "assemblies, PE, yoga and music".
[22]Materials relating to Millthorpe school and Key Stage 4 and "core PE" state:
…students follow programmes of study that mirror and extend key stage 3…extend their skills in sports that they have experienced…follow a number of sports that are new to them. Example include…Squash, Yoga, Junior Sports Leaders Award, Netball Leaders Award, Cycling, Trampolining and Bowls.
[23]In relation to Browns School literature from the school mentions that the "modern sports hall" provides:
…us with generous covered space for daily occupational therapy exercises, yoga, gymnastics, indoor hockey, football, badminton, netball and basketball.
[24]In relation to University provision we a saw a document with hyperlinks to seven universities.
[25]Yoga is mentioned in the AQA exam board specification for the GCSE in Physical Education. The specification is made up of units examined by a written paper (on knowledge and understanding for the "active participant" and a controlled assessment for units relating to the active participant). The specification sets out six groups of activities under various headings which are available for assessment against the latter type of units. Groups 1 to 5 deal respectively with game, gymnastic, dance and athletic activities. Group 6 relates to exercising safely and...
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