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 do feel sorry for kids who will have to move because their parents have made decisions about their schooling that they can't really afford to sustain, but I don't personally think that's a reason not to tax private school fees.’

What? Hopefully you are not affected enough with everything having gone up. Be careful when they come for you. If income taxes were not so high to begin with more people would be able to afford the increase. At this stage people paying for the welfare bill or net contributors are literally working to pay taxes and interest and barely surviving. You can never plan in this country they want to bleed you to death.

You make a good point about the bursaries and the pupil funding in state schools

Private schools round here allow state schools to use their facilities. This may have to stop

Agree it's pretty low for politicians to do this if they have been privately educated themselves

DH works in a private school.

They have all been looking into this for quite some time and so far have no clever ideas to mitigate the increase. It will probably add 15% to his school fees after offsetting. Paying fees in advance is a possible but they expect the legislation will foresee that tactic anyway.

Many private schools locally and nationally have been struggling since Covid, his included. He knows of two locally that will probably close in the next 12 months, his own school was looking shaky but he anticipates the VAT will tip them over the edge as his is the kind of school where most parents can only just afford the fees anyway.

Planning for merger and potential closure is also happening.

It will mean 500 kids without a school at short notice, and around 70 teachers and staff. It's a disaster for everyone.

I feel genuinely sorry for children whose parents are forced to move them, especially if they are in exam years. One of our local independents shut with very little notice a few years ago and it caused a lot of disruption to some children's education through no fault of their own. One of my friends had a DD going into Year 13 and a DS going into year 11 which she had to find schools for at very short notice where they could finish their exam courses. They ended up in different schools, miles apart and the DD had to swap to a different syllabus because the only local school that could accomodate her subjects did a different exam board. She coped, but it was very difficult for her and her former classmates to be starting year 13, doing University applications etc in brand new schools. There will probably be casualties of this policy who are put in similar positions and I feel sorry for those young people on an individual level. Unfortunately it will be those who can only just afford their fees currently who are most likely to be put in this position as the very rich will either pay up and barely notice or will have accountants who find loopholes. I don't think it will affect Eton or Harrow in a major way but I can see small local independents going under as a result. For those reasons I have misgivings about this policy, though not enough to stop me voting Labour.
However, some of the comments from private school parents on these threads have made my eyes roll. They're in the same vein as those from a distant relative that I ended up sitting next to at a family wedding recently. She spent the whole meal moaning about how terrible contextual University offers are and how her poor DD is being discriminated against. They should stop this and level the playing field for private school pupils. Out of respect for the bride and groom I avoided getting into a fight but I did comment that "£42k per year school fees" and "level playing field" weren't phrases I found easy to put together. It's a cliche, but some people really do need to check their privilege.

The super academic ones maybe, but there are plenty of less competitive ones with a % of kids with SEN, especially autism, that is far above the National average because they have smaller, quieter classrooms, much better ratios of teachers to children, but better ratio of SEN professionals to children and better pastoral care. The appeal is obvious.

I do not have children in such a school, but I do know people on much lower incomes than the stereotype for private school who have taken this route for their children who were sinking beneath the waves in state.

Point 3 only applies if the school fees are classed as a business expense. If the contract is between the employee and the school, it is highly unlikely that the school will be able to recover the VAT. It is more likely if the contract is between the employer and the school, but I suspect the government would legislate to class it as a non-business expense, meaning the VAT is not recoverable.

SMH at this thread, though.

How typical of a bunch of Ronnie Riches to try to find a slightly dodgy loophole which enables them to avoid a reasonable financial penalty.

But they aren’t. I went to a shit comprehensive. It’s one of my DFs biggest regrets that he couldn’t send me and DB private. Some areas are fortunate to have decent state schools. The one I live in isn’t one of them.

You should be more angry that state schools are not funded enough to educate all children

There will be loopholes for businesses as many large banks prefer to pay private school fees (and sometimes even rent) as a carrot for bringing Indian employees over on their Indian contracts.

It can't stop if they want to keep their charitable status

Why do you think a Labour government would choose to leave loopholes for large banks?

They can make sacrifices to pay the VAT them!

If you earn enough to be a net contributor and you're barely surviving, there is probably something going wrong with your budgeting skills. I suggest you take some advice on how to live within your means. Cutting back on school fees that you don't appear to be able to afford might be a good starting point.

And yes, I hope that they do "come for me" and people like me who can afford to pay more tax. I would prefer to live in a fairer society.

They may not be able to stretch any further

If they can't stretch further then they can choose to send their child to state school. Life for everyone is full of having to make choices based on what we can afford.

Well they are very very hard to get for kids who really need them. So I don’t think a council is going to be giving them out willy nilly!

Yes

However more competition for state places as a result

And that's difficult at an individual level but not being able to afford everything we want is just part of life. Private schools are a luxury that have never been affordable for all who might want to use them.

It isn't as if people won't have seen this tax coming, so hopefully most will have planned accordingly. Either with savings to cover the difference or moving their kids to state at an appropriate transition point if they knew that they wouldn't be able to afford the extra.

Btw my dc didn't go to PS and are all grown up

I have a DS with an EHCP so know the system and believe me if you get an Education Lawyer and a tribunal experienced Ed Psych if your child has any SEN it is doable.

Again demonstrating the advantages that come with privilege

The cognitive dissonance is outstanding:

When wealthy people try to play the system it’s trying to ‘find a workaround’. When poor people try and do it it’s cheating and benefit fraud.

You are absolutely right we used both as we didn’t know the system and felt that we were being pushed by both into an expensive independent which we knew was unsuitable and would have been a disaster. We stuck to our guns and glad we did. I am not saying the professionals were corrupt as such but its looks good to them winning expensive placements. A basic EHCP if a school can meet needs is nothing to them.

True. Like the relative I mentioned upthread not seeing the irony in her outrage at her perception that children from deprived backgrounds are given an advantage via contextual offers whilst simultaneously spending ££££ to buy her children a probably much bigger advantage...