My client is a 99% ESFA (government funded) apprenticeship training provider. So they are Ofsted registered and have one giant contract with the governement for delivering apprenticeships under their framework, with the funding (and associated funding caps/conditions).
But they are also being hammered by VAT charges, which as the supply is outside of scope, they cannot recover.
I have tried HMRC and tried to say that we are an Eligible Body, i have also tried to put a claim in for VAT recovery under form 126, but they are saying we have to qualify as a S33 business in order to do this (but another advisor said we didnt? because we are controlled by the government then we are not actually "in business"?
I could really use some help with this one! Where can I go from here? VAT levels are currently being expensed at a rate of £35k+ per year.