VAT on Courses for Schools
Background
Since the creation of VT Four S Ltd on 1 April 2004 as a Joint Venture between Surrey County Council and VT Group, Four S no longer shares the same VAT code as Surrey County Council or indeed all of Surrey’s schools and other establishments. It is now treated, in accounting terms, as a different legal entity.
What are the consequences?
The consequences are that from 1 April 2005, all transactions that are made between Four S and either Surrey County Council or any Surrey schools and other establishments need to include VAT. For example, in the past, to attend a training course organised by Four S, you would have sent a cheque for £100 you now need to send a cheque for £117.50 and we will send you a VAT invoice in return.
Does this means that Surrey Schools are paying more?
No, it definitely doesn’t.
We will send you a VAT invoice, which you can book to your accounting system and use to claim back the VAT from HM Customs and excise as part of your normal VAT return. Currently, any other suppliers used by schools that are VAT registered charge VAT on top of the net price of any goods or services, and schools claim the VAT amount back as part of their VAT return. Four S should now be treated in exactly the same way.
What happens if I choose to have the money journalled rather than paying a cheque?
VAT arises at the point at which a good or service is paid for. By having the money journalled from your account, the good or service has not yet been paid for. It is paid for when Four S claim back the money that has been journalled from Surrey County Council. It is at this point that VAT is added.
So, if you have the money journalled from your account, only the net amount will be journalled (i.e. £100 in the previous example). Four S will then invoice Surrey County Council for this money and at this point will add VAT. Hence, if you have charges journalled to Four S, Surrey County Council will pay the VAT and reclaim it as part of its normal VAT return.
Does this change the relationship that we have with Four S?
Only from a legal and accounting point of view. We are still the same organisation that we were before 1 April 2004, with the same consultants and the same ethos. Our purpose remains to enable world-class education, and we look forward to continuing to do so with all of you!
Who do I contact if I have any queries?
As with all accounting issues, please feel free to contact the Schools Finance team who will be more than happy to help.
Head of Finance
VT Four S Ltd
