School Shop

To provide pupils with access to a range of supplies an on-site shop may be operated by the academy trust.  The shop may supply various items related to education, such as study materials, calculators and stationery.

While many shops will operate solely on-site, where a digital or online shop is used the VAT treatment will be the same.

Some shops will supply uniform and clothing – this is covered separately – see the link below.

Where food and drink is sold, such as in a “tuck shop”, the rules relating to food and catering will be relevant – see the link regarding catering below.

Guidance in Notice 701/30 “Education and vocational training” (part 8) expands on the HMRC’s view of how closely related supplies should be treated.

The Notice says

“closely related refers only to goods and services that are:
•  for the direct use of the pupil, student or trainee
•  necessary for delivering the education to that person”

This indicates that HMRC take a strict line on interpreting qualifying supplies.  Their guidance suggests that sales of goods from school shops will not qualify as being closely related as these sales of goods are not needed for regular use in class.  The Revenue are likely to make the argument that any items considered necessary for education must be provided by the school without charge to the pupils, thus preventing these sales from qualifying as closely related.

However, this is contradicted by the Educational Manual (VATEDU7000), which provides an example of closely related supplies (if sold at or below cost) as including items such as calculators and stationery sold for use in the classroom.  This unhelpful inconsistency of opinion is indicative of the difficulty in establishing whether supplies are business or non-business supplies.

VAT Treatment