VAT for Driving Instruction
November 30th, 2021
I will start by saying I am a driving instructor, not an accountant. These basic points are correct at the time of publishing. I would advise getting professional advise in relation to VAT.
Value-Added Tax (VAT) registration is obligatory when your turnover exceeds, or is likely to exceed, the VAT threshold. The threshold depend on your turnover in any continuous 12 month period. The threshold for driving instruction is €37,500. This means that if you are getting payments for driving lessons that are going to exceed €37,500 within any twelve month period you should register for VAT. It would be advisable to get an account to assist with this.
Driving lessons are generally subject to VAT at the reduced rate. This means that 13.5% of all of your gross income goes the Revenue, less any VAT paid on expenses. These expenses can include the purchase of a new car! It is worth noting that diesel is can be included in this, but petrol can not. Again, an accountant will help with this calculation.
However, lessons concerning instruction in vehicles which are designed or constructed for the carriage of 1.5 tonnes of goods or more, or for the carriage of 9 persons or more (including the driver) are exempt from VAT.
A full document explaining VAT on training can be found here. There would seem to be an argument for further exemptions for driving lessons.
For more help and advise for driving instructors you might join the Unite Driving Instructors Union. Visit here to find out more.