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/

So which family will pay least for the exact same foreign summer holiday, in Greece say, including both transport and accommodation?

a) a state school family in Edinburgh leaving on 29 June
b) a private school family in Newcastle leaving on 6th July
c) a private school family in London leaving on 6th July
d) a state school family in London leaving on 27th July.

Who will have the most choice/cheapest accommodation? It will be (a) the Scottish state school family.

Who will have the most choice/cheapest flights? It's clear that (a) the Scottish state school family can get cheaper flights than (b) the Newcastle private school family.

It's possible that the London families can get cheaper flights than (a) and (b) - but I'm happy to take your word for it that Edinburgh has such good flights that isn't the case (for those Scottish families far enough south to fly from there).

Depending on where you go, accommodation is usually a larger part of the overall holiday cost than transport if you use the cheap airlines and book ahead.

So the Scottish state school family gets the best holiday availability/price. Then the English private school families. Then the English state school family.

Of course, the English state school holiday dates are entirely the choice of the English LEAs who set them. With sufficient notice they could choose different dates, or even stagger them for different regions as many other countries do.

Will VAT on private school fees lead to a partial collapse of the sector? thread is full up, but turning to this one I don't think Scottish school holidays are particularly relevant and some English state school parents choose to pay fines to get cheaper holidays.

We won't know the exact rules for the 20% VAT until Labour drafts the relevant legislation. The budget long document summarising all the Bills and King's Speech just mentioned 20% VAT on private school fees but said no more.

Only to point out the double standards when some posters say that the VAT is offset due to English private school parents getting better holiday availability, whilst ignoring that Scottish state school parents get even better availability, and that it is in any case entirely within the power of English LEAs to help English state school parents too.

I see. I hadn't picked up on the point being made. If VAT is about £10k per family the few families who might choose to go away in England the week in July before state schools break up I suppose might save a bit but it is nothing compared with the VAT increase and any business rates caused increase and of course some women work full time solely to afford school fees and 100% of their wages after tax simply goes on school fees and holidays are sacrificed entirely for some.

School fees are paid monthly or quarterly (depending on the school) so it can be absorbed by wealthier people. Eg for every £20k in fees vat will be an extra £330 a month for one child or £760 for two. Most wealthy private school families can absorb that. The people who won’t be able to are the working class who might choose privates for non-academic reasons and may already be making deep sacrifices to send their kids. Eg my child’s best friend’s parents are a carer and an uber / delivery driver — they chose to delay renting a whole house until after their sons leave school and so rent a room in a HMO (and dad is working a second job to pay the bills)z For them £760 is massive — practically an entire wage - but these are the kids you want in private school.

Assume you don’t use Amazon as they don’t pay the tax they should either?

If you can show that your child genuinely has SEND that a state school cannot cater for (and believe me, most state schools' SEND provision is pathetic) and your child has an EHCP, the COUNCIL will cover ALL school fees at a nominated private school, and not necessarily at a specialist SEN school.
An ECHP is very difficult to get without legal help, so the best way to achieve this is to hire an educational solicitor. The cost is about £20k, about the cost of one year's private fees.
So, for the cost of one year's fees, you can get an ECHP for your child with SEN and also have the rest of your child's private schooling paid for by the council.
I know a good number of parents who have saved themselves about £100k in school fees that way.
So you can save not only the vat, but also the entire fees!
I can see a lot more of this happening, so in addition to getting some vat in, the state will be paying a lot more in fees for those who have been priced out and instead choose to spend the money on an educational solicitor.

Too much envy here. The injustice doesn’t just lie in state/private but in the huge disparity between state schools. Our local state school is surrounded by £1.5m houses and the school is fantastic.
Also, I’m sure that most of those with no pity at all for those who now have to pay VAT, irrespective of the sacrifices they may have made, still use Amazon, despite the fact that it pays only a fraction of the tax it should. As I said, too much envy and not much consideration of the bigger picture.

All of the "pay your taxes like a conscientious citizen" comments really are pathetic. I pay huge amounts of tax and work incredibly long hours to earn the salary I do. But I have friends earning a lot more who send their kids to state school and just load their pensions - what are they doing to be conscientious citizens exactly? Just using up more state resources. So now we will move close to the outstanding grammar to avoid school fees at secondary stage.

Distance isn't usually the issue with grammars - passing the exams at a sufficiently high level to get offered a place makes the difference

Yes the score comes before distance but you do need to be within catchment. Hopefully the score will be OK.

@Boater Catchment matters in Bucks. And getting a qualifying score. As vat is from Jan 35, people will need to give notice now. People with a y10 and y12 will find life difficult for another year. My LA is already saying it doesn’t have many schools with spare places.

Great. So get your child a label that they may not need and to hell with the consequences.
Totally irresponsible of parent and such schools who encourage this.

All these threads about VAT in private schools just shows unbalanced this site is.

Amazon pays all tax that is due. if you don't like tax law and how it applies to Amazon lobby to have the law changed. People say all these threads about VAT probably do not understand how since 2010 the higher earners have had massive massive tax hikes whereas most other people have had reductions; these people also often have 9% student loan tax and upper marginal rates of 63% in effect and no personal tax allowance and no "30 free hours" childcare - they have the highest tax burden for 70 years and then this - these doctor/teacher couples who work full time both parents do not have a lot of spare money because so much is taken in tax to be wasted by Big State.

Catchment is irrelevant if you don't pass the exams. And only helps to an extent in areas where a certain catchment gets preferential treatment.

Perfectly possible to arrange matters to get the 30 hours free childcare whilst it's helpful. Just shove cash in pensions.

Yes this is what I do.

Which is fine if you don't need the income. It's not really reasonable for the government to effectively cap the income you can earn - by making it financially negative to go above £100k unless you can jump all the way to about £150k.

For a single parent on £100k in London with 2 kids in nursery, spending £31k taxed income on nursery (which includes 30 free hours and £4k tax free childcare), £24k on renting a very ordinary 2-bed suburban flat, £6.75k student loan, £2.4k zone 1-4 travelcard to get to work, she's left with precisely £360 per month for the 3 of them to live on (food, council tax, bills, clothes, necessities etc). But no help from the government, because she earns so much!

If her salary is £120k, she might like to actually take that extra £20k to live on instead of putting it into pension. But on that extra £20k she would pay £12.4k tax, £1.8k student loan repayment, and would lose £4k tax free childcare and £10k funded hours. So she can't.

£360 per month is the most the government allows her to take home per month to live on (for 3 people) after childcare, rent and commuting.

She needs to jump to £142k before she can take home a single penny more!

Our tax system is completely ludicrous.

Someone said on a previous thread that the private school VAT is the final straw for professional workers.

I think they were right, speaking for me. Not because it pushes me over the edge of affordability (in my case). But because it's made me look in detail at taxes, benefits, disposable income at different income levels, and how incentives for individuals affect society.

I've completely lost faith in the fairness and reasonableness of our tax and benefit system.

How can it be reasonable for professional workers to fund families on benefits to have children they can't afford themselves? How is it OK for a single mother to have the same disposable income regardless of whether she earns £15k or £75k? What the hell are we thinking as a nation to say we need immigration when it's simply because we make it impossible for professional UK workers to have the children they actually want but can't afford?

It's completely shit.

VAT on school fees is the tip of the iceberg.

Where is the children’s father in this scenario?

Maybe left and avoiding child support. Maybe dead.

There are plenty of women bringing up kids with no help from the fathers - at all income levels.

That's actually why I think the solution is to fully fund pre-school childcare without means testing, paid for out of basic rate income tax.

That way everyone pays equally, and it's spread over your whole working life. Removes the barrier to women working, and removes the need to collect so much child maintenance from absent fathers (which is impossible to collect). In time, everyone will have benefitted from their own childcare when they were children (like school) so it isn't unfair to people with no children.

All in one neat policy.

But because 'high income' people would get some of the funding - shock horror - (which they also contributed to) there's no way that such a sensible policy will be accepted.

25% of families are headed up by a single parent.

It's completely impossible for an unsupported single parent of pre-school children to work full-time unless they're either on benefits or earning over £150k.

And for professional women, if you're out of the workplace for 5-10 years, it's incredibly hard to go back at the same level.

How does this make sense for the UK?

Ah, so this particular woman isn’t real.