Following a case pursued to the Court of Justice for the European Union, the Revenue have accepted that local authorities, including local authority schools, can now treat the sports services exemption as covering their supplies of sports facilities.
HM Revenue and Customs have been forced by the European Court to accept that the supply of sports services by local authorities should be a VAT exempt supply in most instances.
The updated guidance in Revenue and Customs Brief 6 (2017) was issued on 29 December 2017 and explains that councils can "opt to make a claim for exemption". This wording seems somewhat misleading as the supply will be VAT exempt where it falls within the definition of sporting services.
The "claim" aspect referred to by HMRC is likely to be relevant to local authorities where steps are taken to correct past periods.
The importance of this ruling for academies is to be aware that VAT should not be charged by local authorities for the hire of sports facilities, such as football pitches, all-weather pitches and tennis courts. The exemption will also cover other sports services where tuition is involved.
Where VAT has been incorrectly charged it will be necessary to seek a refund from the local authority rather than through a claim from HMRC using Form VAT126 or the VAT Return. The change of view about this supply means that the amount previously invoiced as VAT is no longer validly described as VAT and so is repayable.
The Revenue guidance can be found here.