The Assisted Instrument Purchase Scheme (AIPS) enables pupils of local authority and academy schools to purchase musical instruments net of VAT.
To be eligible, pupils must be in state education and taking instrumental tuition through the school, local authority or (in England) a Music Hub. This can include playing in a Local Authority or Music Hub orchestra. In short, the instrument must be suitable for the pupil’s needs and be used as part of their education. The school must purchase the instrument and supply it to the parent at or below the cost without VAT.
Local authorities and state schools (maintained and academies) can offer the scheme but are not obliged to. Music services that are not part of the local authority (e.g. charitable trusts) cannot offer the AIPS.
Further details are included in section VATGPB7825 of the HMRC VAT manual. Some retailers offer their own advice.
There is no way to combine buying an instrument through the AIPS with the Take It Away scheme.