Source · Select Committees · Education Committee
Recommendation 59
59
Rejected
FE and sixth form colleges face an unjustifiable VAT burden on expenditure.
Recommendation
Whilst academies and schools with sixth forms do not have to pay VAT, FE colleges and standalone sixth form colleges are not eligible for refunds in the VAT they incur on their expenditure. As colleges were reclassified as public bodies in 2022, this arrangement is unjustifiable and FE colleges and sixth form colleges should now benefit from a VAT exemption, which would align them with other post-16 education providers. (Conclusion, Paragraph 219)
Government response summary AI-generated
The government rejects the recommendation for VAT exemption for FE colleges, explaining that while education services are exempt, many public bodies cannot recover VAT on their expenditure, and any changes would need to be considered within broader public finances.
Government Response
The government responded to this report on 9 December 2025. No passage in that response could be matched to this conclusion. Read the response document ↗