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Written question asked by Alex Sobel (Labour) on Friday, 9 October 2026, in the House of Commons. It was due for an answer on Tuesday, 13 October 2026. It was answered by James Murray (Labour) on Monday, 19 October 2026 on behalf of the Treasury.

Further Education: VAT

Question

To ask the Chancellor of the Exchequer, what estimate his Department has made of the annual cost to the Exchequer of extending VAT refund arrangements comparable to Section 33B of the Value Added Tax Act 1994 to eligible further education colleges.

Answer

In relation to business activity, FE colleges enjoy an exemption from VAT which means that they do not have to charge VAT to students but cannot recover it either.

For their non-business activity, FE colleges are unable to reclaim VAT incurred. We operate VAT refund schemes for schools and academies which are designed to ensure that VAT is not a burden on local taxation, and that academies are not disincentivised to leave Local Authority control. FE colleges do not meet the criteria for either scheme.

The Chancellor makes decisions on tax policy at fiscal events, and does not routinely comment on proposals.

Secondary information

Type
Written question
Reference
32465
Session
2026-27
Grouped for answer
Yes
Subjects
Further education Repayments VAT
Legislation
Value Added Tax Act 1994
Link
View this Written question on www.parliament.uk