Capital goods scheme and pre-registration input tax for private schools

Key points

• The capital goods scheme applies to all VATable capital expenditure on land and buildings with a value of £250 000 or more.
• If a private school registers for VAT on 1 January 2025 and submits calendar quarter returns the first CGS adjustment period will end on 31 March 2025.
• There is a difference between the rules and time scales for goods and services for pre-registration input tax.
• Impact of partial exemption apportionments and capital goods scheme claims.

Imagine the following situation: a private school constructed a purpose built gymnasium facility on its premises five years ago costing £1m plus VAT. The school has never registered for VAT because all supplies of private education are currently exempt from VAT so it could not claim any input tax on the project costs. However fast forward the clock to 1 January 2025 – when private school fees and...