Giles Calverley, business services manager at international accountants and business advisers Mazars in Nottingham, says that where academies do go for registration, large areas of their activities will be not be subject to VAT – such as donations, grants, hire of property and meals provided to students.
He said: “Academies need to examine their activities and income in detail and, where required, address any VAT questions to an academies VAT specialist.
“Academies need to think carefully about their business activities to ensure they do not inadvertently create additional VAT liabilities.
“When it comes to VAT, land and property can be a complex area and specialist advice should always be sought, especially when large capital projects are planned. VAT should always be an important consideration.”
VAT registration, he stressed, is an option even if the academy does not exceed the threshold – currently £79,000 a year.
This is because registration could enable increased VAT recovery on business expenditure and reduced compliance costs.