Can VAT be reclaimed on nursery trip expenditure?

Can VAT be reclaimed on nursery trip expenditure?

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A nursery I'm looking at is part of a larger (charitable) group and is registered for VAT in a group scheme. It claims back some VAT via a partial exemption calculation.

Expenditure on trips and activities has always been excluded from this calculation though. I'm not sure why - as far as I can see if the trips can be classed as having an educational benefit then they should be able to reclaim the VAT from them.

Can anyone confirm this?

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By George Attazder
14th Sep 2011 11:20

Or deny it!

The trips are incidental to (or if no separate charge is made, part of) the main supply.  So when a school supplies a trip it is part of/incidental to the supply of education (exempt for a private school, non-business for a "state" school).

The primary supply of a nursery isn't education, it's care.

Whichever way you look at it though the school trip supply (if there is a separate supply) is incidental to a main supply that is exempt.

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