Taxation and VAT
The concession available to academies in relation to Value Added Tax (VAT) remains a key consideration for academies. Amendments to legislation combined with the fact that there are regularly new interpretations to VAT laws, make it essential to seek the advice of experts to ensure that wherever possible, liabilities are reduced.
Our VAT staff has worked with a range of organisations in the voluntary sector for many years and has successfully negotiated with HM Revenue & Customs on several significant cases.
We are able to provide a detailed VAT review which looks at all of your current activities together with future plans, and helps to identify potential opportunities or possible pitfalls.
Our academy taxation and VAT services include:
- VAT registration
- partial exemption methods
- planning in relation to property transactions and business/non-business apportionments
- updates on VAT legislation and HM Revenue & Customs policy
- support during HM Revenue & Customs inspections
- representation at VAT tribunals
- ad hoc VAT support
- VAT reviews and health checks
VAT action points for immediate consideration:
1. Review the Academies activities to determine VAT status of each income stream.
2. If income derived from vatable streams of income is > £73k – register for VAT
3. If income from vatable streams of income < £73k – option : register for VAT or use
Parish Refund Scheme.
4. Consider pros and cons of registration or Parish Refund Scheme if both are options.
5. Analysis input tax (VAT on expenditure) into categories:
- Directly attributable to non-business supplies
- Directly attributable to taxable supplies
- Directly attributable to VAT exempt supplies
- Not directly attributable to any specific supplies
6. If not, assess whether full or partial recovery – if partial consider most beneficial method of calculation.
7. Also does your current accounting system allow you to account for and report on VAT in an efficient manner?
8. Consider impact of withdrawal of VAT grant on your budgets and cashflow forecasts.
9. Review income streams for corporation tax purposes and consider whether a separate trading subsidiary is required.
