“Clear” that multi-academy trust should have been paying tax on its phonics product income, accounting expert states

Wandle Learning Trust faces fresh questions over its Little Wandle product.

Academy trusts need to think very carefully before getting involved in “trading” activity, a prominent accountant who works in the sector has told Education Uncovered.

Phil Reynolds, an accounting consultant who also works as chief financial officer at a small multi-academy trust, was speaking after this website revealed that a south London-based chain had launched an “investigation into its tax status” after gaining more than £12m in income over three years from a phonics product it sells to schools.

The Wandle Learning Trust, which is associated with the Little Wandle phonics programme, reported in its annual accounts that it had wrongly not registered itself for VAT in previous years, and that it was now facing a “historical VAT liability” and a fine. The accounts stated that it is likely that, as a result, the trust “will face late filing penalties from HMRC, which are deemed not a proper use of public funding”. The accounts added: “Whilst legal and financial advice had been sought in previous years, no definitive action has been recommended until very recently.”