This guide is a supplement to the main accounts payable and accounts receivable VAT guidance.
In line with HMRC guidance we are no longer able to process claims from schools for the refund of VAT on Private School Fund expenditure and would like to feed the following information out to schools immediately please:
Private School Funds
In order to comply with guidance from HMRC, Derbyshire County Council will no longer process reclaims of VAT on expenditure incurred by a Private School Fund.
A Private Fund may however make a donation to a local authority school, to buy goods and services. VAT will be recovered on these purchases, made directly by the school, the same as any other expenditure. Donations to the school can be made in the same way as parental donations and coded to 222000, VAT code AN, on the cash journal.
Ownership of goods and services purchased by a school using private fund donations must be retained by the school and they must be made available for the school’s own non-commercial purposes.
In respect of Voluntary Aided or Foundation Schools, VAT cannot be recovered on purchases funded from donations from a private fund if either:
- The money used for the donation came from a direct grant from the Department for Education to the governing bodies, or
- The money is used to fund works that are the responsibility of the governors (most commonly capital works)
Imprest expenditure VAT
Reclaims for VAT on Imprest expenditure can continue to be made, but we wish to remind schools that these must be made no later than the following school year and in accordance with the guidance notes on the Imprest VAT reclaim form. Late claims will not be processed.
All school staff involved in financial transactions should have access to both the main accounts payable and accounts receivable VAT guidance and read them in conjunction with this supplement.
All VAT transactions must meet our financial regulations.
Section one covers purchasing, including an annex on school trips and voluntary aided schools and section two deals with income related issues.
Please ensure you take the time to familiarise yourself with the information contained and that new staff are also made aware of this guidance.
VAT is an important subject and we are responsible to HM Revenue and Customs (HMRC) for control of the VAT accounting system. We all have a role to play in ensuring we get it right and do not make careless errors that can lead to penalties.
You can contact the Technical Accountancy Team to discuss any issues regarding VAT, email: v.at@derbyshire.gov.uk
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