The announcement in the Autumn Statement allowing 6th Form Colleges to convert to academy status was a very welcome one.
The VAT position of these colleges has become increasingly anomalous over the last few years. Broadly, local authority schools and colleges can reclaim virtually all of the VAT they incur on their core activities.
There are similar provisions for Academy Schools. However, until this announcement, 6th Form Colleges had very limited scope to reclaim VAT on their costs.
This change will result in a significant financial boost to these colleges.
We envisage that the change will be implemented by extending the scope of section 33 of the VAT Act and wonder if the chancellor will now come under pressure to extend these refund provisions still further.
Charities and Housing Associations should be following this story closely – and campaigning and lobbying hard for change!