RegulationCorporate GovernanceNAO warns of VAT threat to city academies

NAO warns of VAT threat to city academies

VAT liability stunts academies' ability to service community, warns NAO

The government should ease a tax burden on flagship city academies that
restricts them from opening up their facilities to the local community.

A report by the National Audit Office found that academies were not opening
up their facilities to the public because of potentially large VAT liabilities.

Academies that open up their facilities to the public for more than 10% of
their total usage incur VAT liabilities on the construction cost of the academy,
which cost an average £24m to build.

‘There is a need to resolve the issue of large, unfunded VAT liabilities
falling on academies if they do not restrain communities’ use of academy
buildings,’ the report stated.

‘Academies are typically built in areas that have historically suffered from
lack of educational investment, and they are an enormous community resource. The
department and HM Treasury should seek to reach rapid agreement on an
appropriate mechanism that would enable academies to raise community usage above
the 10 per cent threshold allowed under the regulations governing eligibility
for VAT relief.’

Further reading:

Academies programme slammed
by NAO

Related Articles

Corporate governance: staying ahead in accountancy

Corporate Governance Corporate governance: staying ahead in accountancy

2m Alia Shoaib, Reporter
One in 20 audit firms quit as market evolves

Audit One in 20 audit firms quit as market evolves

1y Kevin Reed, Writer
Colin: #EURef bankers a problem

Business Regulation Colin: #EURef bankers a problem

1y Taking Stock
Best Practice: Saffery Champness managing partner Rob Elliott

Accounting Firms Best Practice: Saffery Champness managing partner Rob Elliott

1y Calum Fuller, Reporter
Standard Life Investments opposes EY's appointment as Shell auditors at AGM

Accounting Firms Standard Life Investments opposes EY's appointment as Shell auditors at AGM

1y Richard Crump, Writer
PwC and Deloitte chiefs sign Remain letter

Business Regulation PwC and Deloitte chiefs sign Remain letter

1y Kevin Reed, Writer
Leader: Audit competition drives change, not necessarily quality

Accounting Firms Leader: Audit competition drives change, not necessarily quality

1y Kevin Reed, Writer
EU audit reform to open up £10bn market for firms

Accounting Firms EU audit reform to open up £10bn market for firms

1y Richard Crump, Writer