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HMRC internal manual

VAT Government and Public Bodies

Local authority education services: voluntary aided schools: introduction

Voluntary aided schools are founded by voluntary bodies, usually religious organisations. Their governing bodies are legal entities.

These schools provide education as part of the statutory requirements of the local authority and this is a non-business activity. The local authority funds this provision of education. The governing body is a separate legal entity from the local authority and will need to register for VAT in its own right if its income from non-educational activities exceeds the registration threshold.

The extent to which local authorities can recover VAT incurred in connection with VA schools has been agreed between HMRC and the Department for Education.