Academies that do not have business supplies at this level will generally not wish to register for VAT voluntarily, and so can reclaim the VAT through a special refund mechanism under s33B of the VAT Act 1994.

The details of this special refund scheme remain unclear. HMRC have indicated that in due course a special refund form will be available specifically for Academies, but this is not currently available. We have received confirmation from HMRC that in the meantime Academies can submit written claims for VAT under s33B. The claims must:

• be in writing to HM Revenue & Customs, GABS Team, 6th Floor SW, Alexander House,
  21 Victoria Avenue
  , Southend-on-Sea. SS99 1AA;
• cover a period of at least one month, and which ends on the last day of a calendar month. Claims can therefore now be made for the period 1st April to 31st August;
• supported by invoices and other records, which must be kept for six years. There is no need to send supporting evidence with the claim.

We would remind Academies that the claim should only cover VAT incurred in respect of non-business activities. If goods or services are purchased for both business and non-business use (e.g. overheads such as telephone costs, light and heat, professional fees), then a "fair and reasonable" apportionment should be made to restrict the claim. Further complications can arise where the Academy has exempt income (such as rental income) which can result in the need for more complicated partial exemption calculations.

Academies may be concerned about the implications of getting their refund claim wrong. UHY Hacker Young are able to review your first claim to ensure that it appears reasonable, so please contact us if you require assistance or help in this area.

Analysis of YPLA Accounts Direction

On 31st August the YPLA issued its Accounts Direction - including the model "Coketown" financial statements - to provide guidance to Academy Trusts and their external auditors.

Some key points to note in the Accounts Direction are as follows:-

• many Academy Trusts may no longer need to include a separate income and expenditure account in the financial statements;
• the non-statutory detailed income & expenditure account has been removed. Instead an updated version will be required within the abbreviated accounts return (AAR). This is an Excel file that will be populated from key information in the financial statements, and will be signed by the governors and submitted with the audited accounts to the YPLA, but which will not form part of the audited information;
• guidance has been given to governors on how to prepare their governors' report for inclusion in the financial statements;
• a more detailed review of the recognition of properties has been given (on pages 31-32). This includes an explanation of how to account for buildings procured from a DfE grant, through the BSF programme, and where the existing buildings are leased from a predecessor organisation, or where legal title is transferred from the predecessor organisation.

• Paras 9.5.6 explains that where an Academy has assets or liabilities other than the main school fund under its control, then these should be recognised in the Academy Trust accounts if the Academy has control over these funds. Typical examples would be school holiday funds, or "journeys" or "trips" accounts;
• Paras 9.5.9 to 9.5.13 confirm the treatment of amounts transferred on conversion to Academy Trust status. The Academy will usually inherit the predecessor school's assets and liabilities - although care should be taken to refer to each individual school's transfer agreement - including use of the buildings and assets, any pension scheme deficit, and the surplus or deficit on the predecessor school's budget. The assets/liabilities are recognised in aggregate as either net income or net expenditure, and are shown as an exceptional item on the face of the Statement of Financial Activities. Academies that own the freehold to the school buildings are therefore likely to show a net donation, whilst schools that do not own the freehold and also have a large LGPS deficit are likely to show net expenditure;
• Para 9.5.8 confirms that where there is a surplus on the predecessor school's budget then the funds will be unrestricted if there is no specific purpose attached to them and the Governors are free to use the fund at their discretion in furtherance of the Academy's general objects;
• Paras 9.3.1 and 9.3.2 discuss the specific requirements where there is a Federation of a number of Academies operated by a single charitable trust company.  The notes to the accounts will largely present the aggregate total for all Academies managed by the Trust, but certain notes are required to present the results of individual Academies. In particular the GAG note, the Funding for the Academy Trust's educational operations and the Fund note need to be prepared individually. The detailed LGPS disclosures can be made individually or collectively. The Governors' report should refer to the Academy Trust as a whole, but will probably also include information about individual Academies.

The Accounts Direction document is available to download at YPLA Accounts Direction. 

Charity rates relief - are you claiming yours?

Due to their charitable status Academies are entitled to relief from business rates on the school property which is wholly or mainly used for educational purposes. Relief is given at 80% of the full or transitional amount due.

To claim this relief an application form must be completed, and these forms can be obtained from your local county council. 

TR17a deadline reminder

An important deadline is drawing nearer. Academies which converted prior to 1st April 2011 are required to complete and submit their independently audited Teachers' Pension Scheme TR17a returns to the TPA by 30th September (if the End of Year Certificate prepared earlier in the year was not audited).

GAG 3 no longer required

The YPLA have announced that there is no longer a need for Academies to complete and submit the GAG 3 "Provisional year end return", which would have been due by 30th September.

We understand that the YPLA have withdrawn this requirement for the academic year 2010/11 and will review the situation regarding future use of this form.

Payroll giving

HMRC have recently made available a reference guide for school charities on the subject of payroll giving and gift aid. The guide is available for download at HMRC, and provides a brief summary of how gift aid and payroll giving applies to donation to such charities, which include Academy schools.