To ask the Chancellor of the Exchequer if he will take steps to ensure that value added tax is not recovered from Building Schools for the Future funding where this money is being used to refurbish voluntary aided schools. (101708)

While the construction of certain new charitable buildings is VAT zero rated, VAT is always chargeable on the refurbishment of existing buildings—including schools. Where VAT costs for the refurbishment of voluntary aided schools are not reclaimable by the school under the normal VAT rules, I understand from DfES that they will be funded through the Building Schools for the Future allocations for the refurbishment project.

EU VAT agreements mean that it is not possible to introduce a new VAT zero rate for the refurbishment of voluntary aided school buildings.