There has been much comment as to a possible reclassification of Further Education Colleges to become public bodies. The hope is that this would equalise access to the beneficial VAT recovery position that local authorities run Sixth Form Colleges and the newer Academies network can access. News released yesterday in an article from FE Week has, however, confirmed that whilst English colleges will be reclassified as public bodies, this will not change the current VAT arrangements they work under. This leaves colleges with the inability to recover VAT on costs incurred to support further education provision.
There are some specific VAT benefits to be secured by colleges across the UK. These are primarily on the Reduced VAT rate for relevant energy costs and the removal of VAT on qualifying construction projects which deliver new buildings for their “non-business” teaching provision. Ensuring your college benefits from these reliefs will remain vital in the absence of any broadening of VAT recovery from your activities as a further education provider.
We are also seeing some activity on building projects being prompted by funding through various “levelling up” initiatives. VAT remains a tax with some complexities for the Further Education sector across the UK.
To stay alert to the VAT savings that can be secured don’t hesitate to get in touch. Contact our VAT Team at firstname.lastname@example.org or fill in the form below.