VAT on school fees not applied retroactively- ultra wealthy are safe

[Kitkat189]

VAT on school fees won’t be applied retroactively to school fees paid before 29 July meaning if you paid your child’s entire education upfront, you escape the 20% increase. I know people who did this in the hopes that this would happen and now it has. TELL ME HOW THIS IS FAIR??? The ultra wealthy won’t be impacted by this at all while other families are going to have to move their children. To those of you who support VAT on school fees, please know that it won’t apply to everyone and that some of the revenues from this will be lost. If you think it won’t matter because very few will have prepaid, you should disagree with this on principle.

regardless of where you stand on the topic of VAT on school fees, I think we can agree this is fundamentally unfair.

Well done for your shrewd financial planning

And for having £200k in readies available to pony up in advance.

I’m still on the support committee of a private school and very few parents have paid in advance ( I did ask ) however the school has managed to keep any increase to a minimum by taking steps to reduce costs. Primarily in terminating bursaries, joint initiatives with local state schools including funding SEN places and sharing sport or science facilities. Luckily we have avoided redundancies by redeploying staff into the main school.

You may not be that lucky. It looks as though a year in advance will be ok, but schemes involving several years in advance will be scrutinised by HMRC. You may still have to pay it

that was written in May 2024

ie they are talking about paying in advance to avoid any introduction of VAT ie before the GE

Why do people say this while posting on a thread they could have scrolled past? This phenomenon needs to be studied

what job do you do? or family contributing?

But this was always the obvious outcome of this policy. The pulling away of the ultra rich and the most elite schools was the clear outcome of a policy that makes something more expensive. It’s why only really rich people have Lamborghinis.
This policy will just mean that the truly elite schools get better because they don’t have to worry about any of their friendly state initiatives any more, and plough money back into the school - they might even not bother staying a charity and then they can find great investment opportunities. The smaller schools will lose out.

It’s because the outraged posts from private school parents are really annoying! They are patronising and offensive to those of us who don’t think that ‘but I’m rich’ is a moral stance, and they take up a disproportionate amount of space (… just like the alumni of private schools of course)

What makes you think a good school and state initiatives are mutually exclusive?
It makes you sound like a snob.

many of the ultra rich won’t pay in advance they’ll keep the cash and make more then the 20% rise through investments.

Not sure quite what you mean?

The HMRC consultation document says it will challenge schemes that allow prepayment of fees where the actual fee amount hadn’t been set when the payment was made.

In that respect I’m not sure it matters when the GE happened.

the article was written before labour won and the policy implemented.

so it is talking about what a number of parents did sensibly do… paid upfront and will avoid VAT before the deadline.

these parents will definitely have avoided paying the VAT

anyway i have got to go to bed now. Tomorrow…

Yes, thanks to your shrewd financial planning

you should disagree with this on principle.

And so what if I do? My opinion literally makes no difference so why are there so many people trying to convince others that the VAT proposition is wrong. The whole of MN can agree with you @Kitkat189 it won’t change a thing.

Edited to say, why don’t people spend their time writing to their MP instead? You know, instead of crying to MN

It really doesnt.

All fees incurred for Jan 2025 are liable for vat whether paid in advance or not

I didn't have children but have paid taxes contributing to state education and to the various benefits all parents have received for their children. I don't mind at all as I see taxation as for the greater good.

That's fine. People who paid it all in advance and are now finding they owe VAT only have the VAT to pay each year now. They took a chance and lose out on the growth shrewd investing could have given them. That's up to them.

Oh my god, I still don't care. What's not fair is having a two tier education system.

What fees ?.

Only if the pre payment scheme meets the HMRC requirements of it being defined amounts for each term, is my understanding.

So for those that have paid for a year in advance, the termly fees will be defined and the payments will be for those set fees (or can be for longer periods if the term fees are set several years in advance, as the PP said is the case for Radley).

But if you’ve prepaid (say) an amount of £20,000 for 2028 and the 2028 term fees have not been defined - then that’s what HMRC will be looking at.

At least that’s my reading of it.

That isnt what the document says. You’re only reading part of the paragraph.

I know people say that overall due to declining birth rates there are/will be plenty of state school places so I hope it all works out.

Are you in the UK? I don’t want to be the bearer of bad news, but…

www.mirror.co.uk/news/politics/number-overcrowded-classes-schools-rocketed-24716057

I could get behind a higher rate VAT on Lambos tbqh.