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/

I respect and applaud what you have done. However, I suspect that you have done more than the vast majority of "rich" or "could have afforded private school" parents in the state sector have done, or that parents driven out of the private sector will do.

I also suspect that your school was much nearer the end of the fundraising spectrum which makes it more possible to achieve good outcomes on the current level of state funding. And I further suspect that your schools are the type that will be the first port of call for any parents who opt out of the private sector at 4+ or 11+ because of VAT. I have a sneaking suspicion that they're not going to grace schools anywhere near the bottom of the hierarchy.

In the case of my dd's primary school, you would be absolutely right. It is exactly the kind of school that private school parents would be likely to choose if they switched to state and I'm sure that it would be pretty far along that fundraising spectrum.

However, as far as dd's former secondary is concerned, I suspect not. It was rated as "requires improvement" in her final year there, so I very much doubt that private school families will be flocking to it in any significant numbers when the VAT on school fees kicks in. As for fundraising, it had a very mixed cohort - plenty of children from privileged backgrounds with very engaged parents but also a higher than average number of kids on free school meals. They all benefitted from the funds that were raised.

And no, of course many wealthy parents won't bother to do what we have done, but actually, in my experience, a lot do. And the more that do, the better.

I’m not implying that at all. I have great respect for the hard work of teachers. My own DH is a retired Science Teacher. Well off parents are able to move to areas with the best state schools. If there were no private schools (and I speak as someone who sent my daughter to private school from year 9), schools in all areas would improve because there would of course be a limit on those who could live in the areas of the current ‘best schools’.

Interesting.

So, despite your involvement with the school, by the time your daughter was in her final year the school had presumably slipped down the OFSTED rating scale (as you only mention it being rated RI in her final year).

So whilst helping out with interview practice and work experience is absolutely a fantastic thing to do, and it would be great if more parents could do this, in fact your involvement and the involvement of the other "very engaged" parents didn't help the school with the quality of its teaching or management, which is what makes a big difference to educational outcomes (caveated to say that obviously I don't know on what grounds the school was rated as RI).

But yet a few ex-private school parents are somehow meant to make a huge difference to state schools - even though you didn't seem to manage it?

I have said it before, I am not sure how any parents are meant to be able to influence to any meaningful extent the way a school is run, or to improve the quality of teaching, unless they all apply for jobs as teachers or SLT roles.

I don't think it's quite as simple as you assume. Parental engagement can absolutely help to improve a school, and it can undoubtedly make a difference to the children's experiences, but other factors are of course at work as well. The RI rating was for fairly specific reasons in this case. It doesn't take away from the many positive things which were happening in the school, several of which were highlighted by ofsted as strengths.

Parental engagement is no magic wand and of course it isn't going to fix everything where there are other significant problems that need to be addressed. That doesn't mean though that a significant cohort of educated, engaged and proactive parents don't make a massive difference.

And I would add that parents can actually have a great deal of influence if they choose to join the governing board of a school. Ultimately, the governors are responsible for hiring and firing the headteacher and holding them to account. That is not insignificant.

Interesting read.
How the Independent Schools Council created a misleading headline on VAT

https://taxpolicy.org.uk/2024/06/02/independent_schools_misleading_vat/

And who are Taxpolicy.org.uk ?
Dan Neidle - Wikipedia

"He is a member of the national constitutional committee of the Labour Party,[1] its senior disciplinary body."

Why would they say anything different?

If boarding, would sending children abroad or to a crown dependency eg Channel Islands or Isle of Man mean avoiding paying VAT? UK boarding schools are popular with overseas children who I presume will not incur VAT.

Don’t read the posts about private schools and VAT if they get under your skin so much.

Hi just wanted to say sorry from all these idiots who have been rude and unkind... I am afraid we are live in a world were you either poor or rich , you can't be somewhere in the middle and be taken care of by any system.. it's so sad .. so if you are poor the lesson seems to be staying poor because if you can't get rich and you are in middle you will get abused by public and get broken by government...
I bet whoever been nasty here they keep their working hours low so they don't have to pay income tax ...it easy to hide behind the user names .

I’m trying to avoid these threads because they don’t make either side of the argument look good but it’s not a business expense so you wouldn’t be able to reclaim the VAT through a company. I also suspect HMRC will be all over avoidance schemes for these things.

I’d be very wary of taking this kind of advice not only from anyone on here but also from any professional advisor who claims to have some sort of avoidance scheme. In my experience HMRC end up winning in the end.

Although the tone of this thread isn’t helpful to anyone what a lot of people are saying is true - you’re just going to have to pay it.

No it isn’t. The only point that has merit is the first one.

Her state primary was already excellent...not least thanks to the contributions of parents like us over many years .Nothing to do with the teaching and staff then.🙄

It should be but it isn’t. They are oversubscribed. Those in PE make a saving on the state system. If all children left PE and went state schools they would not even have the physical space never mind teachers. Yet they don’t pay less tax do they? So in reality they will be taxed twice. The pettiness of the responses on here is vile. If you don’t have the answers move on with ur bitterness. People in private aren’t elitist, usually quite modest and already paying a fuck tonne of tax as it is. If your so riled about what you have or don’t have then do better

This!!!! Well said exactly.

so many here assuming that these private school parents will just have to forgo a ski trip- NO! Many are extremely frugal in order to afford PE to do whatever they can for their child. They do sacrifice a lot. And they do save cost on the already over saturated public education.

a 1% vat increase accross the board would see far greater return and a fair approach to greater funding without crippling a small group of individuals who already make a vast contribution through income tax.

go ahead and be bitter but maybe just realise other civilians aren’t the enemy or cause for another person’s hardship, it is the system itself and you all just bought it

Have to agree

It will overload the state schools and make competition for the better ones even worse

But many do go on foreign holidays end of July before the majority break up - this saves them a lot of money probably equal to the VAT they will be paying. So its swings and roundabouts.

Those extra weeks at the start of the school summer holidays are indeed one of the silver linings to school fees. It's maybe 20% less expensive (certainly not the low costs you get fully outside holidays) but there's better availability, which is really nice.

But you'd have to be spending a mind-blowing amount on holidays to save the £4k VAT will cost on it!! Who spends £20k on holidays? Maybe people who don't pay school fees!

Let alone spending enough on holidays for the 20%-ish saving to offset the £7k we already save the state as well?!

So no, it isn't swings and roundabouts.

Btw, do you think Scottish state school parents should also pay an extra tax for having the exact same benefit?

I suppose they do pay more income tax, but that's a devolved choice and they do get other non-means-tested benefits such as free university education in return. They don't pay an extra 'unfair holiday dates' tax.

Or is OK for Scottish state parents to be able to go on holiday at non-peak times because they're not Enemies of the State: unlike private school parents?

It will be very locally dependent. Our primary is outstanding- great facilities and probably about as close to a prep as you’re going to get. But, there are significant behavioural issues and they struggle with the county’s approach to rejecting ECHP funding and lack of resources to deal with SEN. At secondary there is massive distortion. 7-10 miles away are brilliant state schools. I’d be happy to send my children to them but we’ve got no chance is catchment is less than a mile. Our catchment secondary is horrible and I’d love to not go there. We are a couple of years off but all the chat at the moment is about vat and it pushing people out of affording private. There are lots of people contemplating a move into the catchment area of the excellent schools. Seems a better financial investment on the face of it but will cause some massive distortions. Also people might stretch for 5 years of private to gcse but then choose stays for sixth form.

I agree with the previous poster that it is swings and roundabouts. £20k pa on holidays would not be considered excessive for many of the private school parents I know. If you are in the habit of going away a few times a year with a family of four, it soon mounts up. The £7k you are saving the state doesn't really come into the argument as it was your choice not to take up a state school place available to you. I'm not sure what you are getting at with the Scottish situation. Although the holidays are at different times from English holidays, Scottish families are still booking holidays at peak times during their own school holidays.

The long October half term always seems popular with the wealthier private school parents I know, booking autumn hot spots like Seychelles and Maldives at a cheaper rate than they would the following week, and then feeling really pleased about it (I would too, a real perk!)

Scottish families are still booking holidays at peak times during their own school holidays.

So?

@Oakandashsplash said "many do go on foreign holidays end of July before the majority break up"

Prices for those foreign holidays - or even UK holiday locations which are popular with both Scottish and English families (like Scotland itself, Cornwall, Wales, London) - obviously don't depend only on how many families of the same nationality are holidaying at the same time, but the total number of families. Certainly that applies to accommodation, but even for flights: since flights abroad from Scotland are rarely direct, they are in competition with English families for the 2nd leg of the flights

Scottish summer holidays run end-June to start-August - even earlier than English private school holidays.

So Scottish state school families will be competing only with 700,000 scottish state school children's families for those holidays, which will be even cheaper 1 week earlier.

Compared to English private school families competing with 600,000 English private school children's families + 700,000 scottish state school children's families - ie the families of 1.3million children - a week later.

How do Scottish school holidays run from end July to start of August? 😂 You do know that Scotland is a different country don’t you and many direct flights go from Glasgow and Edinburgh? Or maybe you don’t.

Absolutely. Edinburgh is the 6th busiest airport in the UK and as 4 out of the top 5 are in the London area, if you disregard them it's the second busiest provincial airport in the UK after Manchester with direct flights to over 150 destinations worldwide. Glasgow is a bit smaller but still has a good range of direct international flights mainly to Europe. Most people wishing to fly direct from Scotland to a mainstream European holiday destination will be able to so without difficulty and there's quite a few direct intercontinental flights too. There isn't the same range of destinations as from Heathrow it's true but it's certainly not rare for Scots to fly direct! We are just on the English side of the border but my DH often takes flights abroad for business from Edinburgh or Glasgow as they have more choice than our nearest English airports.
And flight prices from Scottish airports definitely do go up when their schools break up and drop from mid August when they go back. Being reasonably close to airports on both sides of the border we always look at them all and you can save quite a lot by choosing different airports at different times.