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/

It is one of those irregular verbs.

I save money.
You bend the rules.
He is a tax fraudster and should be in prison.

More seriously, it is not true that everyone who sends their child to an independent school is wealthy. However, anyone who evades tax is cheating and committing fraud, no matter how rich or poor they are.

There was no suggestion from the OP that they were talking about illegal ways of avoiding VAT. I bet most people on this thread use ISAs and pensions (and other legal methods) to save tax.

Absolutely.

Avoiding tax (i.e. arranging your affairs to legally reduce your tax bill) is absolutely fine.

Evading tax (i.e. fraudulently reducing your tax bill) is illegal and wrong.

Without extra schools how are
all these extra kids going to fit into our schools from Sept? We already have 34+ in a class. No extra classrooms either, so have shift systems lessons or use corridors? This hasn't been planned properly. Like the NHS plan to reduce waiting lists by asking already burnt out staff to work evenings and weekends? What a joke.

I agree, but IMO it won't be an overnight influx.

It is likely that most parents will simply pay the (likely) 15% increase. Many other parents will continue to pay until their children complete that phase of their education.

The real threat to private schools, again IMO, will be reduced intakes. This will mainly affect the smaller, cheaper schools that are already operating on a knife's edge. I think the first 4-5 years of this policy will see many of these smaller schools close.

If I was bringing this policy in (and I do think it is the fairest way) I would do 2 things:

Firstly, I would phase it in over 4-5 academic years or apply it only to new students joining schools. I think this would still be the death knell for the smaller schools, but it would spread the closures a little.

Secondly, I would create a fast track route to converting to free schools and/or academies, perhaps with added financial incentives to help in the early years (especially with regards to building maintenance)

It’s already been reported by ISC that 3,000 fewer kids are joining private schools this academic year, costing the Treasury £22m. Your plan sounds very reasonable esp converting to academies/free schools. I fear in lieu of extra money from private schools Labour will just raise taxes to fund schools instead. Their spending pledges are enormous and the money has to come from somewhere i.e taxpayers.

We have DC at Private but I really hope you don't find out a way to avoid paying the VAT.
I imagine that loads of "schemes" will spring up around this and HMRC will close them down just as fast and fine you etc. There will be companies who claim to be able to help you - it will be you not them who faces the consequences when it goes wrong.
See also companies that claim they can help you to avoid care fees or set up a way to get GP's to pay school fees and pay them back via a LTD company. Its all dodgy as Fuck and HMRC get around to them in time

I can be angry at more than one thing at the same time

The local demographics of this will vary a lot. There are two private schools in my area, neither is large - I think one has about 25 children in each year group, and the other has 100 children per year. Out of the five state secondary schools within the region only one is over subscribed. Meanwhile most primary schools are under subscribed - some of the very small ones are closing down as not enough children. So if a handful of children are pulled out of private it will make no difference to our schools.

Yes it will vary quite alot. The only private school in my town closed a few years back, the town to the south of us had the same happen, the bigger town to the north of us had two private schools and one closed. Over the 3 towns we have over 30 state primaries so I think taking the children from that one school won't be an issue. We don't have any private schools at senior level.

I didn't say you couldn't did I?
News flash... Your child is not the most important child in the country. All children should have the same chance of a good education.
Vat is payable on luxury goods. A private education is a luxury that less than 10% of parents in this country can afford

I guess you are not reading my posts. Any increase will not affect our family. I just have a different opinion that I think it’s ok for private school parents who might need to disrupt their child’s education do be upset. You don’t have to agree with me but please don’t tell me how I should feel.

Pay all the remaining fees for their education upfront now?

Not all schools allow this and for those that do there are risks in doing so in order to try to avoid VAT https://taxpolicy.org.uk/2024/05/09/private_school_vat_risk/

No, I wouldn't - but it's one way to avoid paying what I view as a legitimate tax on a the luxury of private education.

How much extra tax you pay? you know that you don't need to wait for them to come, you can always pay extra on HMRC portal, right?

Is private healthcare a luxury too?

Yes, private healthcare is a luxury..

yes - why do some state schools in both wealthy and economically deprived areas get fantastic results and some get dire? shouldn't this be looked into / rectified rather than labour saying we'll tax private school fees, recruit 40,000 more teachers - rather than look into why 40,000 teachers a year leave the profession for non-retirement reasons.

Yes VAT is paid on luxury goods but private schools are already saving the state 8,000 per year per child.

This isn't going to fix the state school system, I think whatever happens if they want to improve things then they need to put some more thought into it.

This is going to affect those who can least afford it most, as the super-rich will always find a way round these things.
Decent state schools are already over-subscribed and the situation will become worse as parents will no longer be able to afford an alternative to a state education. Catchment areas will become even more of a focus for those moving house, forcing up house prices. Places at grammar schools will become like gold dust and kids will be tutored to death to secure a place (even more so than now.)
Good state schools which are already full will not be able to cope with even say 5 additional pupils in each year group, so competition for places will become more intense. The only alternative will be to extend state schools and employ more teachers but surely that will defeat the object of the policy - to raise money.
I find this whole thing a bit hypocritical given Keir Starmer was privately educated, as was Jeremy Corbyn. And even Diane Abbott’s children. Perhaps this shows how overpaid and out of touch our politicians are, across the parties.

VAT is by provider not customer.

Waitrose charge you VAT because of the goods and services they provide.
Customers cannot opt out of VAT

SEN schools will close rather than get embroiled in SEN VAT cases

So why is that exempt from VAT?

And there you have it, what a thread title to sum up Tories ‘I don’t want to pay fairly, how do I get out of it’.

Private Education is a luxury, if you want it, pay for it. Kids going to school having not been fed and you’re crying because you’ll have to pay the correct rate for something you don’t actually need to pay for.

What’s funny is the fact that the super-wealthy (real Tories) won’t even blink at the increase. Social mobility for the few eh?!

@Londonforestmum
I don't know. I didn't realise it was. It shouldn't be.

Wow @tiantian1005 well, you've really managed in making me feel even less sorry for all of the moaning private school parents on here than I already did. "Workaround" my absolute arse. As a parent of kids in state school and a teacher (married to another teacher, both in the state sector) this stuff makes me sick.