Labour MP Karen Buck recently raised the issue at education questiontime in the House of Commons. "It is extraordinary that existing academyschools have to pay VAT on community activities," she said. "That is anadditional financial penalty and an obstacle to their providingprecisely the extended sports, drama and other facilities that thosecommunities desperately need." She urged ministers to "sort out thesituation immediately".
The problem affects paid-for activities in new buildings such asacademies, which have charitable status. In tax law, renting facilitiesto community groups is defined as a business activity. Academies, unlikelocal authority schools, are liable for VAT on their use, although theyare allowed to use up to 10 per cent of their time or space on suchactivities before charges take effect.
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