VAT is a complicated tax and it is easy for academies and free schools to make mistakes. We ask expert Helen Elliott for some advice.

In theory, VAT for academies and free schools is relatively straightforward as a special VAT regime allows all VAT incurred on the school’s “non-business activities” to be reclaimed, including the core activity of providing grant-funded education.

This means that all the VAT incurred on supply teachers, teaching equipment and materials, as well as the upkeep of the educational facilities, can be reclaimed. Schools can reclaim the VAT either on a normal VAT return, if registered for VAT, or using a VAT 126 form if they are not. 

However, VAT is a complicated tax and it is easy to make mistakes. The complications usually arise where schools make individual charges for goods or services they provide, for example charging for fee-paying evening courses, or letting out the premises, and/or making charges to pupils for various activities.

Register now, read forever

Thank you for visiting Headteacher Update and reading some of our content for professionals in primary education. Register now for free to get unlimited access to all content.

What's included:

  • Unlimited access to news, best practice articles and podcasts

  • New content and e-bulletins delivered straight to your inbox every Monday

Register

Already have an account? Sign in here