Local Authority schools can reclaim the full amount of the VAT quoted on their catering invoice for both adult meals and pupil meals. Schools can therefore process their catering charges using the gross, VAT and net figures quoted on their invoice.
However VAT must be collected on adult paid meals so these should be charged at the gross cost and the correct VAT element of the income coded out when the income is banked. Please see the examples below.
| No. of meals | 1 | 10 |
| Gross cost of adult paid meal(s) | £3.46 | £34.68 |
| Credit to School Catering Income 82001 | £2.89 | £28.90 |
| Credit to VAT on Income 20% | £0.57 | £5.78 |
| Total amount of receipt/paying in slip | £3.46 | £34.68 |
If completing a coding slip the total value (net of VAT) for paid adult meals income should be coded to VAT category code S and the VAT value should be shown on the 'VAT STD’ line at the bottom of the coding slip.
Information from till receipts/catering records showing the value of adult paid meals served should be used to calculate the VAT liability.