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 could say this about anything though, 'people can't afford to eat and you're spending money on takeaways/holidays/coffees/pret/multiple TV subscriptions - you should be donating that money to charity instead surely'. Education shouldn't be taxed!

The tax should be increased to 40%

What, the VAT rate? 'cos it's all about improving the state schools and not about punishing people you hate...

Disagree. Most independent schools won’t cater for children with the level of need that qualifies for an EHCP. In my experience, state schools are far more experienced at managing a range of SEN due to the fact they’re inclusive and diverse.

It was in the papers today that Downham Prep has closed and a third of its children had SEN. Lots of independents have absorbed SEN and parents haven’t bothered to try and get an EHCP. Its not the case in my area at all and my DS goes to an excellent state but its already on its knees due to the amount of children with EHCP’s and as its the school that most parents would sell an organ to get their kids into its going to get worse.

Not true for my mainstream indie - we have about 2x the rate of send as local state schools, including multiple with EHCPs, and several more who would almost certainly qualify for one. I have found our school to be far more inclusive and diverse than our previous state school, which was rubbish for send.

This is the quote from the head of Downham:

’"We lost a lot of people in Covid… a lot of our parents, their businesses have not recovered. So a lot of them have left and gone to state schools. Then we had the interest rates, energy bills and all of that."

versus what the education secretary has said. She needs to get her facts right.

‘1 in 3 children at Downham Prep School have special educational needs.
**
But Labour’s schools tax means that this school is being forced to close - slashing SEND provision.
**
Same old Labour putting the politics of envy ahead of evidence.’

Yes smaller classes must be better, shame it has shut

Both things can be true. Many schools have been struggling to balance their books as they deal with rocketing costs and parents that are increasingly on the margins of affordability. Vat may not be the only reason for a school closure, but it can be the tipping point.

a favoured labour talking point is around how parents have largely absorbed high increases so far, so an extra 20% isn’t going to make a difference, but that is just nonsensical. Many parents are struggling already given higher than normal fee rises alongside cost of living factors, and vat really is the last straw.

www.theguardian.com/commentisfree/article/2024/jun/02/must-we-pity-put-upon-parents-sacrificing-all-to-send-their-offspring-to-private-school

What a nasty piece. Why engage in the substance of the debate when you can sneer from the sidelines instead?

Once more - it's not education that's being taxed, it's private education. State education is free, and available to all. It's not being taxed.

In polls, the majority of people support the VAT.

If you don't want to pay as much as private schools are asking, then why not lobby them to reduce the fees? If the schools themselves are so blameless, why can't they reduce some of the additional services they provide? Or increase their class sizes slightly?

Directing your ire at people who believe private education to be an optional service or good is clearly pointless - and you won't win anyone over to your way of thinking if you castigate those who are for the VAT as merely engaging in a politics of envy. By doing so, it might make you feel better but you just sound as if you think yourselves superior.

Whether you want to believe it or not, many of these schools play an important role in their communities and in the lives of families using them - they are employers, providers of an educational alternative for children not coping in mainstream, community hubs (our indie offers a broad programme of classes and cultural events that are well attended), providers of affordable non-term childcare via multiple holiday clubs. This act of deliberate harm to the sector is a bit cut off your nose to spite your face, especially as datapoints increasingly point to it not doing much (or even anything)for revenue.

If lots of people support it, that is largely down to a lack of examination of the details and potential impacts. My hope is that as this moves from a hypothetical concept to an actual policy proposal more people will take a closer look and realise this is a terrible idea.

It's not about 'belief' - many of these schools aren't community hubs.

Again, why don't the private schools do what they can to offset the potential effects of the Vat? If PS parents feel so strongly and most people are indifferent to or supportive of the tax, it seems their energy would be better placed to deal directly with the schools or their representative bodies than the electorate at large.

Maybe the people who are against the vat should also wait to see the actual policy proposal too? Casting people who support it as ignorant (or envious) isn't a winning argument.

In general, people who intend to vote Labour will be swayed by a general sense of the greater good given the ills we've experienced under the Tory government. For those who are a bit indifferent or even against the proposed vat, few people agree with every single policy of a political party and given what and who the Tories have sacrificed in their years in power, this is likely to seem a lesser evil.

Way to go OP.

Literally tens of posters have been playing the long game of trying to build up sympathy and an alliance to push back at this proposal and the party that came up with it. And with a single post you manage to blow that out of the water and demonstrate that some parents are quite happy to dodge tax - and pass that onto their offspring as justifiable behaviour - rather than pay taxes like us stupid people

For those who are a bit indifferent or even against the proposed vat, few people agree with every single policy of a political party and given what and who the Tories have sacrificed in their years in power, this is likely to seem a lesser evil.
That's me in a nutshell. I don't agree with all Labour's policies and as relatively high earners I am expecting our family to be less financially well off under a Labour government. But I'm hoping society might do a bit better.
I started off with a fair amount of sympathy for private school families when this idea was first floated, having seen friends' children affected when their independent schools closed, and I'm not convinced of the financial benefits to the nation. But it certainly isn't a hill to die on for me and there are always some people who are disadvantaged by a change of government. I think that more stand to benefit in this case though and the attitudes demonstrated by some of the private school families on this and the many other threads on the topic have made me significantly less concerned about their plight to be honest.

@quantmum how many businesses could absorb a 20% cut to revenue? Budgets at most indies are far leaner than you seem to think.

and I stand by the assertion that the majority of ‘supporters’ don’t really understand the issue - look at the number of posters on here who continue to confuse vat and charitable status.

and quite arrogant of you to claim ownership of ‘the greater good’ - there are plenty of posters who will not be directly affected but still view this policy as a bad for society more broadly. No love for the conservatives here, but I increasingly think Labour would be worse.

'Far leaner' - but why not see where cuts can be made? Why not entertain the idea of appealing to the actual businesses (as you characterise the schools)?

The majority of 'supporters' is not the same as a handful of people on Mumsnet. It's not that complicated - many people think private school is a luxury and therefore it should be taxed.

quite arrogant of you to claim ownership of ‘the greater good’
I didn't claim ownership of the greater good - I said many Labour voters have a sense that voting Labour would be for the greater good, given the appalling state of the country after 14 years of the Tories, and in particular their treatment of the social contract.

Once more, if someone wants to vote for Labour, this tax being a good or bad idea seems unlikely to sway them as it will have less impact on most of the population than many other policies. They're not just voting for this tax. If you want to campaign that people vote for another party other than Labour just on the basis of the proposed tax then go for it - but you'll find far less sympathy for your cause.

Calling me arrogant is a bad-faith take, with a personal insult thrown in - time to disengage yet again from these discussions as so many private school parents posting on Mumsnet seem determined to insult people who aren't against or are indifferent to this tax. We've had 'politics of envy', spite, ignorance, child-hating and arrogance now.

What the priorities are according to a recent poll -
https://yougov.co.uk/politics/articles/49594-general-election-2024-what-are-the-most-important-issues-for-voters

Tbh, if you're a private school parent you should get t it together to lobby your schools, and perhaps Labour via the ISC re. the details of the tax so as to soften the blow.

It's part of one of Labour's 5 key policies, and, for now anyway, they're on track to a landslide victory so you should focus on what you can actually do about it rather than ranting to strangers on MN and insulting non-private school parents.

So much for disengaging @quantmum

That was an extension of my previous post - an addendum if you like. Anyway, keep up the insults, it reflects so well on you.

You’ve hijacked a post by a parent seeking tax advice and are now in a huff because no one’s particularly interested in your armchair political analysis. Do feel free to move on.

Well I don't think that getting private schools to reduce their educational provision is the right solution.

The policy makes no financial sense and will make everyone in the country worse off. Some will be more hurt by it than others, but no one will be better off. Because if 10% of children change to state - or else would have chosen private at a transition points like Yr, Y7, Y12 but instead choose state - then the policy will cost the government more than it brings in. If some of those children pushed across have SEN, then the tipping point will be less than 10%

And we are going to keep pointing that out.

Because that way, the media will question Labour Party politicians about it, and require them to actually do some thinking - actually do the calculations - and explain why the policy isn't harmful.

Maybe Labour will re-think. They have before.

But if Labour go ahead anyway - despite not having been able to justify it - and private school numbers do drop by more than 10% - indicating that the policy has backfired and is costing money instead of raising money - then I hope the media and opposition MPs question Labour about it again. I hope they run and run with it, asking Labour what other services they have cut in order to fund this ideological attack. And maybe then Labour will reverse it.

So I'll just keep going, thanks.

It’s not similar at all. You are offered a state education for free (paid out of general taxation) or you can pay out of your own pocket for a private school. If you can’t afford your current mortgage you don’t have the offer of a free home to fall back on.

As for charging every worker in the country more income tax, just to save 6% of people a tax on what is a luxury purchase, dream on. The only two promises Labour have made so far is VAT on school fees and no extra tax on the working person.

I don’t know a single PS parent who would suggest this. They all moan about it (as they did when they got no refund when schools shut for Covid, as they did when they had to pay more due to increased energy costs and as they did when they had to pay up for teachers pensions) but they accept that it is a fact of life under a Labour government, and they are only surprised it has taken this long.

As for the OP… pay the VAT or pack the DCs off to one of the outposts in Asia that the big boarders have set up. That is a legitimate way of avoiding VAT on school fees.