Assisted Instrument
Purchase Scheme.

What is the AIPS and how can it help you save money
whilst pursuing your musical goals?

  • Information for schools

  • Information for students

 What is the Assisted Instrument Purchase Scheme?

The AIPS is a way for private individuals to avoid paying VAT on any instrument purchases. This applies to replacement parts as well. The AIPS is not enshrined in law, but the taxman sees the instruments, or parts thereof purchased in this way as part of education and not as a private sale.

Certain terms and conditions apply, so if you want to know whether you qualify to potentially save thousands of pounds … read on!

So normally the supply of musical instruments to any private client is standard rated for VAT purposes (net price +20% or price x 1.20). The Assisted Instrument Purchase Scheme (AIPS) enables pupils of local authority and academy schools to purchase musical instruments and their parts through their school net of VAT providing the sale to the pupil meets the criteria below. If the school sells the instrument (or part thereof) to the pupil at the same price or less than the purchase price paid from the supplier to the school, this is VAT free.
If the school sells the instrument to the pupil at a profit, the profit needs to be declared by the school at a standard-rated VAT supply. The scheme is described below.

The Legal Background

AIPS was not introduced by any legislation, but is considered as closely related to the supply of education, which for qualifying bodies is VAT exempt and other bodies standard rated. (See Schedule 9, Group 6 of the VAT Act 1994.) However, as local authority and academy schools deliver education as part of a special legal regime, they are taken out of the scope of VAT by virtue of section 41A of the VAT Act, which transposes into UK law by Article 13 of the Principal VAT Directive 2006.

Therefore the purchase of any instrument or part thereof for the purpose of education is treated as non-business activities.

While normally non-business activities do not allow the taxpayer to reclaim VAT as it is not input tax as defined by section 24 of the VAT Act, local authority and academy schools are able to claim refunds for the VAT they incur making supplies subject to a special legal regime under section 33 (for local-authority schools) and section 33B (for academy schools).

These rules enable the schools to reclaim the VAT on the purchase of musical instruments because they use them for the provision of education.

Rules and Definitions for AIPS (Ts & Cs):

For the purposes of AIPS the following definitions apply: “State education” includes the following:

  • Musical tuition at a local authority school;

  • Musical tuition at an academy;

  • Musical tuition in either a school orchestra or local authority orchestra; and

  • Musical tuition in a local music hub.

“Musical Instruments” includes replacement parts (i.e. bows, cases, shoulderrests, chinrests, potentially even strings, etc).

For the purchase to qualify for the AIPS, the following criteria must be met:

  • The instrument or item must be sold by the business (for instance Bridge Street Violins) to the local authority or school and then supplied onto the pupil or their guardian;

  • The pupil must be receiving state education;

  • The instrument must be used as part of their musical tuition;

  • The instrument must be appropriate to the pupil’s needs; and

  • The price charged to the pupil for the purchase of the instrument must be at or below cost (please see VATGPB7815 for a definition).

 Interested in how you could save on VAT?
Browse the shop pages for options and tell your school.

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that can boost your musical career?