Taxation

Despite being a type of charity, acadmies cannot ignore taxation. The main taxes that must be considered are VAT, Employment Taxes and Corporation Tax.

Corporation Tax

Although academies so not seek to make a profit, it does not mean they can completely ignore Corporation Tax.

Once formed the academy needs to register with HMRC by completing form (ChA1). Support with this registration process is provided as part of our conversion support service.

Specialist advice from experts in the sector

There are a number of basic tax exemptions available to academies under the charity tax legislation. However, not all income streams are exempt, for example certain types of lettings. Where the amount of income from these non-exempt sources exceeds £50,000 in any accounting period then the academy will be required to calculate the taxable profit or loss from those combined sources and submit a Corporation Tax return. We can provide guidance on which of your income streams are non-exempt and establish whether a Corporation tax return is required.

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VAT

Academies have a special tax regime which allows them to reclaim VAT on costs associated with their primary activity of providing free education. However, they also need to consider whether VAT registration may be required if their taxable business supplies exceed the VAT registration threshold.

Griffin Academy Consultants can provide the following VAT services:

  • VAT126 – guidance and assistance on completing the claims, including what must be excluded.
  • Assessing whether the academy trust should become VAT registered.
  • Helping with the VAT registration process and providing guidance on which income streams should have VAT charged.

Employment Taxes

Academies need to ensure they are compliant in terms of employment taxes. Your payroll provider should calculate your monthly PAYE/NI liability, but you also need to consider the following:

  • Dispensations for employee expenses such as travel and subsistence.
  • Completion of P11D forms where required.

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