By the time this article is read, most Academy Trusts will be towards the end of the annual process to prepare and audit their financial statements and the various meetings of trustees will be taking place to review and approve the financial statements.  As accountants and auditors, we attend many of these meetings and are often asked to explain to school staff and trustees what the accounts actually mean. Academy Trust accounts can often run to 60 or 70 pages and are some of the most complicated accounts that we get involved in preparing. We therefore thought it would be useful to answer a few common questions raised by trustees.

HMRC have recently sent a standard letter to all Academy Schools who are not VAT registered and who use the VAT 126 repayment claim form. If you use either the Cycle to Work or Childcare Voucher schemes and charge a fee to employees, usually by salary sacrifice, then you cannot recover VAT on the direct costs, because the income is business income.  The Academy Refund scheme only allows VAT recovery on the costs of providing non-business activities, the free supply of state education and closely related activities such as trips, catering and transport.