Over 50 bursars, governors and head teachers from more than 30 local schools met at Gloucester Rugby Club last week to learn more about how to change to Academy status and how this will affect their day to day running. Delivered by Randall and Payne Accountants & Business Advisors with support from Neil Owen from the VAT Advisory Service, the audience was treated to a lively seminar on the financial requirements and VAT issues surrounding Academy status.

As Ian Selwood from Randall and Payne explained “Academy schools are caught by a whole raft of legislation as a result of being companies, charities and part of the public sector, as well as soon having to register for VAT. In some ways it makes academies more complex than a lot of businesses, but there is help at hand from good professional advisers who are in touch with the Government’s requirements. Randall and Payne are here to help Gloucestershire schools reach high financial management standards and to be financially successful.” In the past schools have had the Local Education Authority (LEA) to do a lot of the hard accountancy work with VAT and compliance, but as the role of the LEA is changing and academies are self managing, there will be a need for more financial control within academy schools which now report directly to Government.

Neil Owen who has worked for HMRC as a VAT officer and advised on VAT for 27 years went on to explain: “HMRC worked on an Impact Assessment of Academy Schools and VAT in March this year. They concluded that ‘Most academies will be VAT registered and will submit VAT returns, through which the refund will be claimed. This should have a minimal effect on current record-keeping requirements imposed on maintained schools if they choose to convert to academies.’ Sadly this isn’t strictly true, as academies will now have to figure out which services and products they buy and deliver are exempt from VAT, outside the scope, or subject to 0%, 5% or 20% VAT rates. The VAT could become quite complex especially where land and buildings are involved and there is as yet very little guidance on VAT for academy schools from HMRC”.

The number of Academy schools is set to rise in Gloucestershire over the next year and the government incentives will make more schools wish to change. It’s clear these schools will need a lot more support from proactive advisers to help them apply for and run with academy status. These schools are publicly funded and it is important that they meet the high financial standards which the government has set for them. Ian comments “Good financial management will help make more funds available to maintain and help improve education delivery which at the end of the day is the critical factor”.

For more information on how Randall and Payne can help you call Ian Sellwood on 01242 548600