27 April 2012
Academies update - April 2012
Are you prepared for the August 31st filing deadline?
As of 1st Feb 2012, the DfE announced that there were 1,580 academies in the UK - over 1,200 of those are conversations since the last election. 47% of all secondary schools are academies, and 53% of all outstanding secondary schools are academies.
Becoming an academy is simple and straightforward with the right support and advisers; making the transition from the traditional LEA way of operating to operating as an academy with company-like responsibilities means new responsibilities and reporting methods need careful forward planning on both an internal and external level.
Working closely with Wilkins Kennedy will ensure that all deadlines for funding authorisation and filing are met, to avoid penalties and difficulties further down the line. Meetings should be scheduled regularly and communicated well in advance to ensure everyone is aware of statistic and legislation changes, board updates and requirements.
It is of vital importance that a timetable is set and adhered to throughout the year – this is simple to lay out and regular and key meetings can easily be incorporated into the academic calendar.
Your advisers will play an important role in helping you to meet your deadlines so work with them to ensure you are organised and able to produce the information needed to compile the end of year financial statement and the annual FMGE return. Advisers at Wilkins Kennedy can assist with wording for trustees reports, policy wording, accounting policies and other first year disclosures.
Key dates for 2012
Education Secretary Michael Gove’s recent announcement that Academies can opt back in to the Local Authority Scheme.
If you choose to remain in an independent scheme, you will have control but will need to ask an actuary to conduct an evaluation every year.
We can independently advise on options available.
Six VAT reminders
1) Existing and newly created Academies should consider whether or not income derived from taxable streams of income is greater than the current VAT registration of threshold of £73k per annum. Where the answer to this question is ‘yes’, then Academies must register for VAT.
2) If you are an Academy providing education for no charge then the ‘closely related’ goods and services you sell to your pupils are ‘non-business’ and outside the scope of VAT provided you sell them at or below cost.
3) Whilst HMRC accept that sales of sports equipment such as well as sales of musical instruments are ‘closely related’, sales of school uniforms and sports clothing are not considered to be ‘closely related’. Income from such sales is therefore business. VAT is due on the sale of any items which do not qualify for zero-rating i.e. those items which are not considered to be children’s sizes.
4) Sales of school uniforms and other clothing qualify for zero-rating provided those items are ‘children’s sizes’ (HMRC accept that garments are designed for young children provided they are at or within measurements which are based on children up to their 14th birthday). It should be noted, however, that commission income received from retailers which sell the uniforms on behalf of the academy is standard rated, irrespective of the size of the clothing to which it relates.
5) Staff and Visitors are treated differently for VAT purposes to students when meals are sold by Academies providing their own catering. Meals sold to staff and visitors are subject to VAT.
6) New school buildings may qualify for relief from VAT at the zero-rate provided they are used for a relevant charitable purpose (‘RCP’), essentially non-business use by a not-for-profit organisation.
The Academies Show
A great place to find out more about becoming and operating as an academy - Wilkins Kennedy will be exhibiting at The Academies Show at stand number 87 on Wednesday 16th May 2012 at Olympia in London (www.academiesshow.co.uk) .
Our Support and WK Academies Seminars
Wilkins Kennedy is here to support you during the period of change and for the future – we produce regular legislative updates, e-briefs and informative seminars for academies.
Please make sure you visit the Wilkins Kennedy website regularly to find out about our upcoming events.
Department for Education - www.education.gov.uk
Education Funding Agency - www.education.gov.uk
Wilkins Kennedy – www.wilkinskennedy.com
For further information on any of the topics above please contact:
Michelle Wilkes FCA
Partner, Head of Academies Group
t: 01689 827505