Teacher purchasing items for classroom - reclaim VAT?

JasonLVC

GavB79 wrote: »

Company credit cards are fine, it is use of employee's personal credit cards that is not permitted in my LA.

Thanks for the clarification but it sort of doesn't make sense, if the argument that the credit card company own the goods, then whether it is corporate or private credit cards, the ownership would still be the CC company.

The only aspect I can see is that a personal credit card purchase doesn't technically meet the conditions for input tax recovery, that being i) the expenditure has to be made by the business, ii) for a business purpose.

But once that expenditure has been repaid in full by the employer to the employee (via expenses) it then becomes i) a business expense and so long as the item has ii) a business purpose then it once again meets the conditions for VAT recovery.

I wonder if that is how this distinction has come about. I've got a friend who knows all about LA's but he's on holiday until end of August (:mad:) so will check that out with him when he gets back for a definitive view on what the score is here.

TM1976

Education is VAT exempt so technically schools shouldn't be able to claim back input tax. As far as I understand it there is some sort of scheme where the school does a deal with the LA for them to make the purchase in exchange for a "donation", this might be where the ownership comes from. The credit card thing doesn't make sense to me but I think it might be more of a procedural thing than something that is actually set out in VAT law.

I can't see the OP being able to claim the VAT back though because she hasn't actually been reimbursed for the cost.

lindos90

As an alternative you could get involved with the PTA, our has a pot of money (well a bank account) from past fundraising events and teachers, groups or clubs within the school can request funding for items in and around school. If you asked for it to be discussed at the next meeting, and you have your reciepts, its worth a try!

Mahmood_Reza

In a former life I was a school teacher and can empathise with the out of pocket costs. A small ray of light - there are a limted amount of costs that you can claim as employment expenses which can be offset against your salary and thus reduce the amount of tax you pay, eg cost of class text books, games kit if you are contractually obliged to teach this, travel between diferent school sites. The NASUWT publiush a useful guide called "The Teacher and Tax" - google search will find it.

marksandsparksgal

Wow, what a lot of replies!

I'm always amazed at how knowledgeable and friendly MSE'ers are, So thank you to everyone!

@JasonLVC - PLease don't worry about the spelling and grammar, I know after hours on a laptop my mind turns to mush! I also read that paragraph on the HMRC site about LCD tvs etc...how lovely would that be! That's the whole reason I thought I'd ask actually.

I've decided not to try to be honest, it's not that much at the end of the day, it was more a case of curiosity really. I take comfort in the fact that it's because it's my first year after training so a lot of the things I'm buying will be going with me to future classrooms/schools.

@meg72 - Thank you, you're all lovely too!

Thanks again everyone. Good times on the MSE Forums. :money:

John_Pierpoint

JasonLVC wrote: »

Any employee can make a purchase of goods or services themselves.....

....Provided the employee then submits an expense claim form and is fully reimbursed by the employer then the expenditure then becomes that of the employer and the employer can then reclaim the VAT where appropriate.

So you could buy a laptop on your own credit card, reclaim the cost via works expenses, laptop now belongs to work, work can reclaim the VAT even though the receipt isn't addressed to the works.

However....you don't say what type of school your work for. If this is a private (fee paying) school, the school will most likely not be registered for VAT as the supply of edcation for a fee is exempt in VAT law. This means the school cannot register for VAT and thus cannot reclaim it.

If you work for a state funded school (grant maintained or ordinary state school), then these are funded by the LEA and are usually VAT registered and this VAT can be reclaimed in part under s.33 regulations which allows government funded bodies such as schools to reclaim all their VAT.

* I've had to re-read this post three times to check for typing accuracy and spelling/grammar, what with you being a teacher, I've had to up my usual posting standards.......

So private schools are exempt - they are probably charities?

State schools are zero rated, like farmers, so get a subsidy of all the VAT those further up the supply chain have paid?

Have I got that right?

Big Society? Joined up Government? Level playing field?

[Is this credit card and VAT business something to do with "We must have a [B]proper VAT receipt[/B] made out to cash or the school's name".]

I find that a lot of commercial organisations produce a proper VAT detailed receipt and you can just cut the payment details off the bottom.

When the VAT goes up to 20% there will be an even greater pressure towards collecting VAT receipts - like the days when road fuel was 25% (?) VAT

msgnomey

When I first started out as a teacher (10years ago) I didn't claim for 'nice' things I bought for my classroom. Now I do put in receipts for everything I spend because I once sat down and added up how much I had spent and realised that if I carried on that way for the rest of my teaching career I would be very out of pocket... I have always found that the schools in question were able to pay me back in full, regardless of their budget position.

JasonLVC

John_Pierpoint wrote: »

So private schools are exempt - they are probably charities?

State schools are zero rated, like farmers, so get a subsidy of all the VAT those further up the supply chain have paid?

Have I got that right?

Big Society? Joined up Government? Level playing field?

[Is this credit card and VAT business something to do with "We must have a [B]proper VAT receipt[/B] made out to cash or the school's name".]

I find that a lot of commercial organisations produce a proper VAT detailed receipt and you can just cut the payment details off the bottom.

When the VAT goes up to 20% there will be an even greater pressure towards collecting VAT receipts - like the days when road fuel was 25% (?) VAT

All education - private, university, local state school is exempt, the difference being is that stte schools have special rules that allow them to reclaim input tax (section 33) whereas private schools and universities do not.

John_Pierpoint

Yes so they are in effect zero rated getting a "subsidy" of all the VAT paid by companies further up the chain of ownership as (say) the wood pulp gets turned into photocopier paper.

They claim back all their input VAT and charge their "customers" VAT at zero percent.
Unlike a charity that does not charge VAT but cannot reclaim its input tax.
It is what got right up Bob Geldorf's nose when he had a go at Margaret Thatcher about the VAT that could not be reclaimed by Live Aid. (As VAT finances the European Union I doubt it was in the power of Margaret Thatcher to give it all back, even if she wanted to do so).