New section 33b status for free schools
There is some good news in the world of VAT for those schools seeking to obtain Academy status, one of the barriers to change was the fact schools controlled by the Local Education Authority are able to recover the VAT incurred on costs, under a special VAT status Value Added Tax Act 1994 s.33, which was only available to public bodies. A change in status to an Academy or Free School, meant these schools could no longer recover VAT, as they did not qualify to use s.33. In its draft 2011 Finance Bill, the Government has agreed to the addition of a new s.33B, for Academies and Free Schools to restore this status and enable them to recover VAT.
Jeanne O’Dell is a VAT adviser and a manager at Mercer & Hole. The views given in this blog are personal to the author, if you would like to discuss the contents of this post with Jeanne you can call her on 01908 605552.
Date: 9th February, 2011
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