Governance & Compliance 74: Temporary 12.5% VAT – Declaration of Income and payment processing guidance
Schools accounting systems don’t have a code for the temp 12.5% VAT rate
The temp 12.5% rate applies to supplies of catering / hospitality, accommodation and admission to certain attractions.
Schools must charge and account for 12.5% VAT on:
- Catering supplied to staff and adult visitors (i.e meals taken in the school canteen and hot take-away food and beverages.)
- Tickets sold for some school productions (where the ticket would normally attract VAT at the standard 20% rate)
Schools will incur and can reclaim 12.5% VAT on:
- The cost of some school trips, such as visits to theatres, circuses, concerts, exhibitions etc.
- Charges for overnight accommodation.
- The purchase of catering services,
Schools will need to process income receipts and /or charges, for supplied subject to the 12.5% rate as gross, outside the scope of VAT, (Code 9).
A VAT journal adjustment can then be completes to declare VAT to / reclaim VAT from HMRC.
Schools will need to email the VAThelpdesk with details of the income / payment, copies of the relevant invoices / receipts and the account (manage – activity – item) code they want the VAT taken from / credited to.
If you have any further queries regarding the VAT rate, please contact the VAT Helpdesk mailbox: VAT Mailbox