The Assisted Instrument Purchase Scheme (AIPS)
A Guide for Parents and Schools
The Assisted Instrument Purchase Scheme enables pupils
having lessons at
LEA schools, VAT registered Academy Schools including Free
schools, University Technology Colleges for 14 - 19 year
Olds and county music services. to purchase musical
instruments without paying VAT.
However, this is a voluntary scheme and not all schools or music services/authorities will participate. (Hereafter called 'schools'.)
This guide is designed to explain the scheme's rules and procedures to both parents and schools, with the intention of helping as many pupils as possible to benefit.
How does the scheme work?
- Once the parent/pupil has chosen an instrument and supplier, they should ask the school to place a formal order with the instrument retailer.
- The parent pays the school the ex-VAT price for the instrument plus any administration charge.
- The retailer supplies the instrument to the school.
- The school can reclaim the VAT on the instrument in the usual way. (Local authorities are refunded any VAT they incur in delivering their non-business statutory activities.)
- The school then gives the instrument to the student.
What are the rules?
The general conditions that the student must comply with to benefit from the scheme are as follows:
- The student must be at an
LEA school, VAT registered Academy School, Free school,
University Technology College for 14 - 19 year Olds or
County music service.
- The school must place an order for the instrument, take
delivery and be invoiced (enabling them to recover the
- The transaction between the student and school must
take place on school premises in a room that is normally
used for teaching.
- The instrument must be appropriate to the student's
needs and ability.
- The instrument must be portable and taken to school
on a regular weekly basis for use during lessons (from
either school or local authority's education department.)
- The school must sell the instrument to the student at
or below cost.
- Pupils of independent schools or non VAT registered
academy schools would not ordinarily be able to benefit
from the scheme - unless the student receives regular
tuition from the local authorities music service.
Operation of the AIPS scheme
The onus is on the school to ensure that they comply with
all VAT legislation and that all AIPS sales are transacted
correctly according to the rules stipulated. For this reason,
the operation of the scheme may vary slightly from area
to area in order that individual schools internal controls
are complied with.
In most instances, schools order directly with suppliers but, in some LEAs, the Music Service or a dedicated administration function deals with all AIPS transactions centrally. In such instances, your school or music teacher should know how to take advantage of the scheme.
In addition, some LEAs make a small administration charge to parents for processing the transaction, which obviously involves an amount of work for their school and education finance department.
Should your school or LEA finance function require more
information on the scheme, this can be obtained from VAT
Notice 701/30 Education and Vocational Training
and for Academy Schools VATEDU70000
HMRC have confirmed that the information presented above appears to be in the spirit of the scheme.