V16.984 VAT Refund Scheme for academies
Information Sheet 9/11, June 2011
1.1 What is this Information Sheet about?
This Information Sheet provides guidance for academies, free schools, 16 to 19 academies, alternative provision academies and university technology colleges for 14 to 19 year olds following the introduction of VATA 1994 s 33B.
Clause 75 of the Finance Bill 2011 inserted a new s 33B (s 33B) into VATA 1994, which will (from the date of Royal Assent to the Bill) refund the VAT incurred by proprietors of academies in certain circumstances.
This Information Sheet explains how the scheme will operate and which bodies will benefit from it.
2 Academies and VAT
2.1 What is the VAT treatment of education taught in academies
Education is taught to pupils of academies for no consideration. Consequently no supply takes place for VAT purposes and the activity is outside the scope of VAT. For further information on the VAT treatment of the activities of academies, including the goods and services they supply to their pupils, please see Notice 701/30 “Education and vocational training”.
2.2 Can academies recover the VAT paid on the goods and services they purchase in relation to their provision of free education?
Ordinarily VAT cannot be recovered on purchases, acquisitions or imports made in relation to non-business activities, such as the provision of free education. However, from the date of Royal Assent to the Finance Bill (probably in July) a VAT Refund Scheme was enacted which allows academies to recover the VAT incurred on those goods and services that