The initiative to create teaching schools under the banner of the “National College for Teaching and Leadership” means that selected academies will receive funding for their services in supporting educational development locally and nationally.
This training is often referred to as School Centred Initial Teacher Training or SCITT for short.
The funds will allow academies to engage in research and development work, as well as training teachers to be more effective.
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There are two key issues when considering the VAT position in relation to initial teacher training arrangements:
Firstly, it is important to consider the structure of the initial teacher training delivery mechanism. In some instances a separate entity, a formal SCITT partnership, will exist and then the VAT position for the partnership will need to be considered in its own right. In other situations the delivery is part of a specific academy school or MAT’s activities and so falls within its VAT entity.
Secondly, for the participating teaching schools the way that funding relates to the services provided needs careful review. Where the funding is directly received in the form of a grant it will represent a non-business activity, with the usual possibility to fully recover VAT on all costs, whether the academy is VAT registered or not. In many other situations the funding is received from a separate SCITT partnership or from the trainee teachers themselves (either from their grants and student loan funding or from their own resources) and in this instance it is likely to be considered a business activity, providing a supply of education or vocational training – a VAT exempt supply.
In some situations the grant funding is received by other academies or even by teachers directly, in which case the services supplied need to be considered on their own merits.
These are covered in the VAT treatment pages for:
Under the School Direct funding arrangements it is common for a formal partnership to be formed between schools and an initial teacher training (ITT) provider, often a university.
This School Direct funding is typically received by the lead school on behalf of the partnership, which can cause some confusion over whether the money is actually school money or whether it should be “ring-fenced” and held on behalf of the partnership.
In turn, the decision as to whether the academy or a separate partnership entity is responsible for dealing with the VAT issues relating to this funding is important, especially if the school is VAT registered, but the partnership is not.