The Government Budget 2018 introduced the Charities VAT Compensation Scheme. Under the scheme, schools as charities may be able to reclaim some element of their VAT costs arising in 2025 based on the level of non-public funding they receive. Schools must exclude income and expenditure from canteens and tuck shops. The fund for the scheme will be capped at €10 million annually. The total amount of claims in each year may exceed the capped amount. If this happens, any refunds due will be paid to charities on a pro rata basis.
The scheme operates on a cash basis:
➢ Income received means actual monies received in the calendar year to which the claim relates.
➢ Expenditure paid means actual monies paid out in the calendar year to which the claim relates.
Claim Criteria
Claims under the scheme for the year commencing 1st January 2025 will be made in 2026 and will be paid one year in arrears. For administrative purposes, claims valued below €500 will not qualify. For example, where a school’s total income for 2025 comprises 70% funding from the State and 30% is privately sourced income including fundraising, voluntary subscriptions and donations, the school may claim 30% of the VAT they have been charged for the year.
The VAT claimed must be on expenditure that is for the benefit of the school directly.
The claim must be submitted before the 30th June 2026.
> Charities VAT Compensation Scheme – More details can be found here
Qualifying schools must be:
- Registered with the Charities Regulator Authority (CRA) at the time the qualifying expenditure was incurred, and
- Registered with Revenue and hold a charitable tax exemption (CHY) at the time the qualifying expenditure was incurred, and
- Have tax clearance status and
- Able to provide a set of audited accounts for the year in which the claim is being submitted.
You must retain all books, records and documents relevant to your claim for a period of six years.
Details on how to submit a claim to Revenue is available here. Schools making a claim should make sure they are set up on ROS to do so ahead of time.
Guidance on calculating figures for the VAT Compensation Claim
> Community & Comprehensive schools
Click here for instruction on how to calculate the claim figures
Further guidance