Question to the Department for Education:

To ask the Secretary of State for Education, for what reasons her Department has decided to refund VAT costs for schools and academies.

Local authority maintained schools are able to recover VAT costs because they are part of local government and their expenditure is regarded as the expenditure of the local authority. Local authorities as a whole are able to recover VAT costs because they are subsidiary tax-raising authorities within the United Kingdom.

When schools move outside local authority control to become academies they are no longer covered by this regime. Since 2011, legislation has been in force that ensures that in this respect academies are treated in the same way as maintained schools. Academies can recover directly from HMRC the VAT which they incur on goods and services.