PARLIAMENTARY WRITTEN QUESTION
Further Education: VAT (14 December 2022)

Local Authority (LA) maintained schools are able to reclaim any VAT incurred on the costs of the provision of education through a refund scheme provided under section 33 of the VAT Act 1994. This ensures that the burden of VAT does not fall on local taxation. Academies and free schools are covered by the section 33B VAT refund scheme; this is to ensure that institutions leaving LA control are not at a financial disadvantage due to their change in status.

Sixth form colleges and further education colleges are not included in the section 33B refund scheme. Like many other providers of public services, they are expected to cover their VAT costs from their funding allocations. Sixth form colleges have the choice to restructure as academies, enabling the recovery of VAT under the refund scheme, but many choose not to.

While the Government keeps all taxes under review, there are no current plans to change these provisions.