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/

Perhaps if it’s a genuine employee benefit it would work but that’s dependent on employers wishing to offer it. And where companies haven’t previously paid school fees HMRC may be rather

Most people advised to do this however are people with their own limited companies. They have a different tax treatment to employees and again HMRC is likely to be rather

If a company owner is also an employee, they will pay the same amount of tax and NI as any other employee.

If the owner is not an employee but instead pays themselves dividends, they may pay less tax. The tax rates are lower but the tax free allowance is only £500. If the owner is not an employee and uses the business to pay school fees, that is not a benefit in kind to an employee so the business would not be able to reclaim the VAT.

The parents already pay tax for education. This government wants to tax twice only because of envy. It is abuse of power, ridiculous!

That’s stupid. If all parents move their children to state schools, where will the government get money “to improve education” as they say? It is so stupid and so obvious. It is pure envy!

Who exactly do you think the Government is envious of? I’m pretty sure Starmer could afford private school if he wanted to.

This ^

I'm sorry but if you're that close to the edge cut back to one car. Have your entertainment costs , extra curricular, holidays .

My last two are still in PS for another 3 years. 4 having been there all the way through. I do not know a single family in over 25 years who have not had at least one foreign holiday a year. Most go skiing at Feb half term.. Cornwall or Cornwall and abroad for summer hols. and Spain or the like in October.

I absolutely support the government decision. Private education is a privilege and a luxury. So absolutely in the scope of VAT. I also have no knowledge of anyone withdrawing their kids - although to be fair they have only been back 3 days so not really in the loop yet... but absolutely no chatter about this in the WhatsApp , as quite rightly I think they would be embarrassed to. - or at least should be.

I actively voted for this as believe those who can afford to pay should. The country is in the pits public service wise.

I am also interested in the EHCP route . I bet my bottom dollar that some parents will be running off to private educational psychologists for Autism Spectrum assessments and then employing lawyers to ensure they get the outcome they want.. all of which of course will cost far more than the 20%.

To my mind it's simple.
IF your child has been placed in a private school by the LA due to appalling decimation of the SEN provision in LA schools then of course . No cost.

If YOU chose PS and can't afford the increase then that's on you.

The only time I have known kids be taken out has been when a divorce has happened and one party refuses to contribute making it financially unviable .

This is such an embarrassing post I am wondering if it’s real. If it’s real and you’ve put four children through private school and think lowly of anyone who can’t afford a extra 20% tax - then you are mixing in elite circles and your sense of entitlement is showing through.

Your attitude to autism stinks if you think it’s a diagnosis a parent can pay to have their child given one - for a start psychologists can’t give autism diagnoses and they know that - their association would want to know about it if a psychologist was pretending they could. Only psychiatrists can do autism diagnoses and it’s a detailed process involving reports from several sources including the child’s teachers.

And if you think people will go around paying lawyers to save 20% on tax through EHPCs you are ignorant too - because EHPCs don’t work that way.

Children don’t just get an EHCP because they have autism. If a child does get an EHCP it’s usually for a government school provision, and if it is for a private provision, than ALL their fees would be paid not just the 20% vat. If it was easy to get an EHCP private school parents would have done this previously well before the vat introduction because it would have meant all their school fees were paid.

I am genuinely wondering if your post is fake from a private school parent hater who is trying to make private school parents look bad.

Sneezeanddessist. The envy isn’t from Keir Starmer who can afford a good state education in a £ million+ catchment area. He only does that to get the vote of the envy people who thinks that private education is luxury. He only does that because he knows he will have your vote and then, cut winter fuel allowance, tax working people, and do all the things he said he wouldn’t do, only to get your vote, but we know it is not true.
The private school idea is another stupid idea only to get votes because we know that state education will get even worse if all children move to the sector. Everyone will loose. So the envy of his followers will make state education even worse.

Ok so you honestly believe that 14 years spent destroying the public sector whilst lining their own pockets - is fixable in 8 weeks ? Ridiculous.

Of course PS should be VAT rated. I have two left with 3 years to go. It's a privilege and a luxury. The very definition of VAT. They have been back three days and haven't heard a peep on the WhatsApp school chat about fee increases or plans to leave. I think the average PS parent would be too embarrassed as they also know we have been able to get away with it for too long.

It's a very labour policy and as a labour voter I was pleased to vote for it.

VAT has nothing to do with luxury. If your toilet needs fixing and the plumber charges VAT, is that a luxury?! Of course it bloody isn’t.

Private school parents haven’t been getting away with anything. VAT is zero rated for education across Europe and most of the rest of the World doesn’t charge sales tax on education either. In fact, some countries such as Australia and the U.S. actually allow the equivalent state school funding to be used towards private schools.

If you are genuinely a private school parent, you clearly have experience of only one school and/or a very narrow group of parents. Maybe have a read of the information issued on behalf of the lady that is issuing the claim that this thread relates to and tell me whether you genuinely think she is privileged.

As a private school mum for more than ten years I can tell you that over the past year I have heard people complain about fees and other household costs more than I have ever heard before. The massive increase in mortgage payments that some people are facing has really started to bite. I have said on numerous occasions (including on this forum) that if it wasn’t for the cost of living crisis, Labour would probably have got away with this policy.

As for pupils not leaving private school, at my DC’s (large, successful all though in the SE), they have reduced reception classes from three to two this year. I just heard at he weekend that another large all through about 10 miles away has the lowest number of reception pupils that it has had for years. The vast majority of private school parents will do whatever they can not to disrupt their kids education but there will be less joining and others will be leaving at transistion points. My DC was in year 6 last school year and more kids left for state then ever before and there is now one class less in year 7 then there was previously.

The problem is, there is the other extreme to this argument where the super wealthy see it as a way to help keep the "riff raff" out (people like me from a working class background).

As a private school parent, this does not ring true, sorry. Everyone is talking about it, and as lots of schools are under significant pressure there will be ramifications for staffing, facilities, benefits for staff, and bursaries. I just don’t buy into your assertion that your school parents aren’t discussing it. Unless there are two WhatsApp groups for parents - one private and one official as there are for many schools?

If you have put three children through private schools, and paid for two more to nearly finish, you clearly haven’t done badly under the Tories either; is it a case of pull up the drawbridge?

And to reiterate an obvious point, your knowledge of VAT is a bit skew-whiff; VAT isn’t on luxuries only, it covers toilet roll for example. Education is generally exempt everywhere in the world as it benefits society as a whole.

I know plenty of schools, the increase would be 5-6k, which is quite a jump to already yearly increasing fees!

Add another child to the mix and that becomes an additional 10-12k a year!

I suspect this is the real reason it’s been pushed through. The children of the super rich become successful without ever needing to be academically gifted. It’s the children of wealthy middle class professionals who perform well academically and so it is them being targetted for what is essentially the gov pushing them back into state.

I don’t agree that people are envious. Most just don’t care as it doesn’t directly affect them.It was hardly a headline policy in Labour’s manifesto. People are smart enough to know that the genuinely wealthy will barely notice the VAT. With regard to the more middle classes scrimping and sacrificing to meet fees, well what is there to envy there? It’s hardly a compelling life choice.

Well, if people didn’t care they wouldn’t have voted Labour. It is a very appealing ideology to get vote from people. But sometimes people are not smart enough to understand that the riches will never be affected, but the working parents who could not get a place in a state school near them, the working parents with SEN children, the working parents who had their children bullied at school, the working parents who needs wrap around care, the working parents who are immigrants and need a better support, those will be affected. So it is not just simply “move them to the state sector as 93% of parents do”. I’m sure they would all prefer not pay thousands every year and have an outstanding school near them without paying a fortune for a house near the school. So your argument “move them to state school” is the same as many who don’t understand that private education is not luxury, but it is a way of helping governments with the pressure on the state sector. If the government had better ideas to make them work better together (private and state), it would be a win-win. Everybody would be benefited. But taxing education is wrong, any country in the world tax education. All parents pay taxes that go to the state education, it is not correct to pay twice no matter which school the children attend, education is their right!

People may have had many reasons for voting Labour even if they didn't care about the private school VAT policy. There are other issues that most people care about much more!

And amongst those who actively support the VAT policy, it isn't that they aren't smart enough to understand your perspective. They simply disagree with you, and they think it's right that school fees should be subjected to VAT. If that means that a small number of parents who can barely afford private will have to shift to the state sector, then so be it. Going to a state school - even one that isn't rated outstanding! - is not a tragedy. Private schools have always been beyond the reach of many parents anyway, so this is nothing new.

And no, I'm not jealous - I have no reason to be.

They can disagree with me, people can have opinion, bit if it is an opinion where they simply judge by the fact of thinking that private education is a luxury of the riches, without considering the whole aspect of the situation and why education is not taxed anywhere in the world, sorry, they are not being smart enough and just giving an opinion based in nothing rather than the narrow and envy thought that riches can buy advantage. Sorry, they will always buy advantage no matter VAT or any other tax that apply to them. And if you think that sending your children to a school that is not good is ok, sorry, it is your opinion, mine is different. If you don’t care that your children will have a good education, good on you. I come from a poor country where we only have education as a way to survive and live in safe areas. People here are fortunate enough to have everything granted to them, that’s why you don’t care in putting your child in an outstanding school, when you pay the same tax as other parents and they have an outstanding state education and you have an average one. If you don’t think it is wrong, leave the independent school parents being able to pay for their child education without being abused by the government and making them paying twice. What is not fair is some state schools be outstanding in priviledged catchment areas and large fundraised by parents, and others barely being able to give the basic learning for children. Opinions are only opinions. This is where the envy comes from. I can’t fly first class so let’s make it harder and nobody will be able too.

What is not fair is some state schools be outstanding in priviledged catchment areas and large fundraised by parents, and others barely being able to give the basic learning for children.

Amen to that! I'll bet that most of the "we could afford private if we wanted to" brigade would be reconsidering their options, VAT not withstanding, if their only state options were schools in the bottom half of the state system.

And just one more thing… the reasons for people voting Labour: to have the pensioners energy allowance cut and raise salaries for train drivers who already earn £50k+ year, to have prisoners being released earlier, to raise NHS salaries where Keir Starmer’s wife work, to double tax SEN parents….etc.
Very good reasons indeed.

If you think that people voted labour on that single policy, you are deluded regarding its significance to the majority. As I said, most people are not that bothered either way. Maybe you can accuse people of apathy but I don't think the majority care enough either way for it to be anything like envy. I'm not sure how "Move them to a state school" is my argument. I believe that it will only be a minority who will move sector and the majority will stay. Only time will tell.

To everyone here saying that private education is luxury and privilege, please explain why any country in the world tax education? Is the whole world wrong?

If they don’t care I hope the legal actions can result in change in this abusive policy and leave the PS parents alone with their choices without being extorted by a radical government. If they don’t care, stop harassing private school parents. Let them leave with their private school preference and keep all Labour voters leaving with their state school preference. So everyone will leave in peace and send children to the school of their preference without harassment or extortion.

Not all Labour voters have children in state schools. Many middle class and relatively wealthy people vote labour. Talk about stereotyping!

Not all private school parents are rich. Talk about stereotyping!