Autumn Statement 2015: VAT and education

Sixth Form Colleges do not have a taxable activity. As a result, any VAT incurred on costs is not recoverable.

The government will permit Sixth Form Colleges in England to become academies.

There is a specific part of the VAT legislation (Section 33B, VAT Act 1994) which permits academies – and not schools or sixth form colleges – to recover input tax which “is not for purposes of any business carried on by the proprietor of the academy”.

Becoming an academy will therefore allow certain Sixth Form Colleges to recover input tax which could not previously be recovered.