Salisbury cathedral

Pre-Conversion Costs

Many costs are incurred in preparing for the opening of an academy.

This is usually funded by a converter grant, but other sources of funds may also be used to cover these costs.

It is unlikely that any of the funding will be consideration for a supply, so the grant income and any other funding is highly unlikely to be within the scope of VAT and will represent non-business income.

It is important to be clear whether the costs are incurred by the prospective proprietors of the academy school/college or by the local authority.

In most instances it is clear that the conversion costs do not belong to the former school/college or the local authority as neither will have any interest in changing the status of the school or college to an academy.

VAT Treatment

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