Ways to avoid private school fee VAT

[tiantian1005]

Hi, not looking for a political debate but has this been discussed on how this can be avoided or recovered as in i am sure there is a workaround. Can we pay the school fee via a limited company then claim back VAT or at least claim as expense or can we do this via a trust fund/

You can apply for an Ehcp to an already skint council and if you get one you are VAT exempt. A school in my area is encouraging parents to do this. The hypocrisy of this is that same school kicked my child out for having SEN a few years ago.

Here's a crafty idea that saves you not only the cat but the entire fees ... send your child to a state school like 93% of the population. That sound of tiny violins is really annoying!

You need a tax advisor. No one here will advise you properly for free, all you'll get is abuse

What? Children that desperately need an EHCP are being denied one by most councils because of a complete absence of SEN services! Htf does a school claim you can simply apply for an EHCP and get one?

So sure you can ‘avoid’ or ‘work around’ it… oh the desperation. How about you just pay it? Teach your children something they won’t learn at private school… how to be fully functioning citizen with integrity.

Indeed.

I wonder how many of their other tax obligations the OP tries to 'work around'.

I know! This particular school was very fond of telling us that they were a “business” yet is encouraging parents to avoid VAT. My DS has an EHCP so know how broken the system is.

Surely your dc would only get an EHCP in sensible circumstances.

I seriously hope so.

School fees are not generally an allowable expense for a company. The exception would be to pay for an employee's child if full time overseas work was expected. A trust fund is possible but won't avoid VAT though (unless the trust is a charitable trust which your own child would not be).

There still isn't enough info yet, schools might be able to avoid charging the VAT on all costs e.g. wages, stationary supplies, not VAT food, so it might not be anywhere near the 20% people fear.

You would hope so but in all fairness a lot of Indies have mopped up SEN children so parents haven’t bothered to apply and may well do so now.

🤣

Don’t send them to private school 🤷‍♀️

In my experience many independent schools won't touch kids with additional needs.

You really need specialist tax advice on this, however, my understanding is:

1. schools should not need to pass on the whole 20% as they should have some input VAT they can offset some of it against
2. if you receive PAYE wages through a company, that company can pay for private schooling as part of what is essentially a salary sacrifice scheme, which already offers a few benefits https://www.gov.uk/expenses-benefits-school-fees-for-employees-child
3. in theory, this same company will be able to offset the input VAT on those school fees against any output VAT they might owe. This assumes that (a) the company has enough output VAT to offset it against and (b) the government don't include this in the way they calculate this benefit in kind.

Agree to a large extent but there are schools like Bredon which although is technically mainstream it is specialist so theres a mix of funded and self paying pupils. It is surprising the amount of schools out there who operate like this. Sherradswood is another example in that its mainstream but has SEN children there funded by the LA.

It seems that the one thing that private schools sadly cannot teach is how to be a decent person.

The relentless bleating from a minority of private school parents who are pissed off about the VAT on school fees is truly one of the most pathetic things that I've witnessed on MN in all the years that I've been using it.

My argument is that it will make it harder for pupils whose parents who could never afford private school to now be in competition with all the ex PS dc and ramp up competition in good state schools

Absolutely - I live near two Grammar schools and an outstanding comp all of which have far more people applying than they have places. Currently not that many children go onto either from private schools but I suspect that will change this year.

You’ve not been around much then. There are thousands of parents who can only just afford the fees and who will suddenly see one of their largest outgoings increase by 20%. That is thousands of pounds more. Not all parents can afford this and therefore have to face potentially moving their children who are settled and happy. It isn’t the kids fault FFS that they are in the independent system.

How people spend their extra money is up to them. Some spend it on alcohol, holidays, experiences, bigger houses, clothes, cars etc and others spend it on schooling.

The vat won’t affect me but the sheer level of spite and envy seen in some of these comments is astonishing.

My DC are/were state educated, as was I. However, I feel bad for any child whose education will be disrupted due to this. I think the fairest way to implement it would be to exempt children who are already in private education until they finish at that particular school. Or a steadily increasing VAT rollout over 4 or 5 academic years.

I imagine that schools will be working on a number of strategies for different implementation scenarios. For example, the childcare/boarding, meals and welfare elements of the fees are likely to be VAT exempt, so they will be working on fee structures that minimise tuition fees. For those who can afford it or have access to cheap finance, paying fees upfront before VAT is added could be an option - although I think that could be a risky strategy as it will come down to when HMRC consider the date of supply to be (usually the invoice date if earliest, but with notable exceptions).

@Ciri

Yes agree, people spend their money on different things and some will make sacrifices to send their dc to PS

Most parents who choose to invest in private school fees will have been sensible enough to do a bit of forward planning. VAT on school fees has been in the offing for years, so most private school families that I know (and I know plenty) will have planned around it and built in sufficient buffers to cover changes like this. I do know a few families who are quite pissed off about having to pay more tax but not a single family with any intention to move their children.

Of course, there will be some parents who have failed to plan properly for all eventualities and/or had other unforeseen circumstances that will render them unable to pay the increased fees (which are likely to be much less than 20% extra in reality). In some cases, their kids will have to move, just like others who have had to move because of job losses, parental illness, rising interest rates etc. I do feel sorry for those children having to change schools mid way through their education because their parents have committed to something that they can't really afford, but sadly, kids have to move schools for all sorts of reasons, and sometimes it's just one of those things. With engaged and supportive parents, I'm sure that the vast majority will make the transition successfully. Going to a state school really isn't the end of the world, no matter how some parents choose to portray it.

As far as I'm concerned, it really isn't spite or envy. We could have gone private if we had felt that it was worthwhile, but having considered all options, we concluded that it wasn't worth it for our dc. Other parents will reach different conclusions, and that's absolutely fine. I do not resent their choices in the slightest, I just think it's right that they should pay tax on what I consider to be a luxury purchase.

What I do resent is the ridiculous bleating that I keep seeing on these boards from people who seem to have no awareness of how pathetic they sound. There are so many much bigger injustices in our society to get upset about, how on earth can this be the one that people choose to get so irate about?!

An increase of 20% on my local private school fees would be an additional £2000 a year, or £166 a month. My utility bills went up by more than that last year!

Ppl are planning now for September regarding state school, our catholic outstanding results secondary, is getting multiple enquiries from private school parents some are and buying up local property. There is not a catchment area per se, but they want to be a short bus, car ride or walk from the school. But it’s oversubscribed.