§ Mr. David NicholsonTo ask the Chancellor of the Exchequer what representations he has received about the levying of value-added tax on meals provided to pupils in schools by private firms, and the treatment of school meals provided directly by local education authorities; and if he will make a statement.
§ Mrs. Gillian ShephardI have received one recent letter on this matter. VAT arises only on supplies made by way of business by a VAT registered person. Where a local authority supplies school meals incidental to its provision of education, either direct or via a contractor, those358W supplies are not by way of business and thus fall outside the scope of VAT. If a local authority ceases to provide a school meal service, and a private firm supplies catering direct to pupils, that is by way of business and VAT falls to be charged.