§ Mr. CartwrightTo ask the Chancellor of the Exchequer (1) whether he will issue advice to local education authorities concerning the circumstances in which value added tax ought to be charged on school outings;
(2) whether value added tax is now charged on school outings; and if he will make a statement.
§ Mr. LilleySchools purchasing taxable goods or services from VAT-registered persons have always been charged VAT. From 1 April 1988, however, local education authorities have been unable to reclaim from Customs and Excise the VAT on purchases of accommodation and the like for school outings which they have organised where the cost is passed on to the parents and pupils. This is because, from that date, a new scheme has debarred tour operators from deducting tax on such purchases, and not to extend the restriction to local authorities making essentially similar purchases would put502W commercial tour operators at a competitive disadvantage. However, where school outings are subsidised by the education authority, the tax remains refundable.
The Chartered Institute of Public Finance and Accountancy, at the request of Customs and Excise, issued detailed guidance to local authorities on the new VAT arrangements in its "VAT News" in February this year.