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 don't think whether private school is taxed or not is related to whether poor kids are fed...

As someone has mentioned earlier this won't actually even raise much money, and if substantial amounts of children move from private to state it will actually be costing the government money..

Labour have said they will use the money raised for free breakfast clubs for primary school pupils and mental health support.

As others have pointed out, Labour has spent this money several times over. Also, the amount they say it will raise assumes that no pupils will move from independent schools to state education as a result of this change. It also assumes no long-term reduction in the number of pupils being educated privately. That, of course, won't happen. If 10%-15% of pupils move to state schools, it won't raise any money at all. If more than that move, it will cost the government money, so the money for free breakfast clubs (if they actually happen) would have to come from somewhere else.

Not sure why free breakfast clubs need to be funded by private school VAT in particular, can't every one pay more tax for this to happen? Why does it have to come from private school parents in particular!? Surely everyone wants poor kids to have breakfast.

Of all the hideous and immoral things perpetrated by Tories during the last 14 years, the dishonesty, the dodgy deals, the tax dodging, lawbreaking, misogyny, destruction of public services, pumping shit into rivers and the sea…

the hill you private school parents chose VAT on private schooling as the hill to die on? The worst poverty we’ve seen since Victorian times, exploitation of workers, decimated police NHS imploding, deteriorating world status…but you feel the most important thing is this? You’re either morally bereft or so short-sighted you don’t deserve a vote! It reminds me of the ‘but Conservatives know what a woman is’. This is SO much bigger, fgs, why not help make schooling better for ALL kids? That will help the country and in turn everyone?

When there are families worried to death about keeping a roof over their heads. Terrified of how they are going to pay the next household bills, people using foodbanks, people sleeping on the streets, old people having to choose between heating or eating. There are people dying waiting for ambulances, waiting 24 hours in A & E just to be seen, cancer patients waiting longer than 2 weeks to be seen & even longer for treatment, not getting treatment that would prolong their lives because it is too expensive & you are trying to find a way of not paying 20% VAT on school fees. Think about the kids stuck in failing schools who are being failed by the system, they will carry on being failed by the system for the rest of their lives, leave school with poor or no qualifications, end up in dead end jobs if they can get a job, then their kids will end up in the same shitty place. But because you can afford it, your kids get the best of everything, that 20% VAT would go to improve the education of those poor kids so that they get a better education, which means they can get better paid jobs, not rely on benefits, earn more & put more money in the system.

Except it doesn’t work like that. Destroying something that works relatively well via a policy that hampers everyone using the service but the super rich, and won’t generate extra net money for the tax coffers (given a significant proportion of children will end up needing to move into state) is simply spiteful and illogical, pie in the sky thinking. But it will win Labour votes as there are enough illogical people out there.

This thread isn’t about that though. It is about ways of legally minimising the tax payable on a service. The same as using an ISA or pension for saving. I have no idea how to do that, sorry!

But would this actually happen.

Perhaps if the government tightened up on money laundering, benefit fraud like the recent case and tax evasion from big companies there would be this money for the schools.

The PS parents have already paid tax on their income for the school fees

In the same way that the percentage of private school kids who will move to state has been increasing weekly, so that by the time the election comes 150% of them will move...

The things the Labour Party will be able to achieve with the money raised has been increasing weekly!

It's now gone from breakfast club and more teachers (both good aims, though not sure they'll manage to recruit the extra teachers) to improving the entire state sector, giving kids on benefits opportunities, and reducing the benefit bill of the next generation. Amazing that just 7% of parents can achieve all that without it costing the other 93% of parents a penny! Let alone the rest of the population who don't have kids at school. And that selfish 300,000 families (out of a population of 67 million) won't even notice it! Of course they can single-handedly fix everything without it costing anyone else a penny.

By the time of the election, I think that VAT income will create paradise on earth, and leave enough change for every state school kid to have a new pet.

Except it won't.

Because at 10% of kids moving from private to state, there's no extra money for the government to spend. And above that it loses them money.

Because far from getting a tax break, private school parents are subsidising the state sector more than if they sent their child to state school. That's why kids moving to state will cost the government money.

So yes, despite all the problems the UK is facing, this does seriously piss me off. Because it's a badly thought out, financially illiterate, ineffective policy which will make my life worse, whilst also making life worse for everyone else too (state school kids included).

It's just illogical though, why does all that have to be exclusively paid by for by parents who choose to send their child to private school? Why not raise taxes in general slightly, which would raise a lot more money and people who are rich but don't send their children to private school can also help out with all the crap stuff going on you mentioned?

What a nasty post. What on Earth makes you think that private school parents don’t care about these things? This is a thread about. VAT on fees though, so that is what is being discussed specifically. It will have a profound impact on the lives of these parents so of course they might have an opinion about it. It may even stop them from voting Labour. Or it might be the final nail
in the coffin alongside other things they disagree with (as it is for me)- that doesn’t necessarily mean they’ll vote Tory (I certainly won’t). People can be upset, angry and worried about more than one thing!

And of course none of these private school parents are also the patients waiting forever for appointments or indeed the NHS staff themselves?! Or the teachers actually working in the state sector? People can be upset about more than one thing you know as they affect them too!

Why do you think that the comments are coming from a place of spite and envy?

As someone who had to face a wave of abuse they my adult son should not have pip to be spent on a cinema trip ( we paid his ticket but it was his carers expenses that are funded via pip and social care) I think that people have to realise that private schools are a luxury and are fair game.

Not many middle class people were so incensed and enraged to see an attack on the disabled by the Tory’s but you are getting you knickers in a twist about private school fees. Do you think the disabled people can afford to go without pip without having to rely on family and friends? Have you any idea what universal credits amount is that forms the basis of their lives with mostly no chance to avoid this.

After the last few friends on disability it’s hilarious to hear people can so angst.

As for avoiding paying VAT I truly hope that people who do that don’t then complain about people wrongly claiming benefits - you are rapidly falling into the same camp if you use a sham employee system via a company for your own children.

The reality is that my the time the private schools off set their expenses against vat it’s more likely to be a 10 or 15% increase if that.

No they won’t get rid of bursaries because those kids help them when they proudly display results and also help bring up the attainment levels by providing sparking partners to other kids. They cherry pick the brightest and best for bursaries. This is why some of the results are dubious.

The use of assets is not even worth mentioning - I tired to get a stage for a SEN drama groups and the local private school wanted the full fee. Not exactly charitable really.

Ffs, pay the fees whatever they are or go to your local state school and campaign to increase funding or to stop all the cuts that this shit show of a government have done

It’s yet another tax loophole that people are able to take advantage of

It’s not a tax loophole. That’s the spin that the Labour Party are putting on it to persuade people to vote for them. Education in zero rated for VAT which reflects EU law. Why do you think that almost every other country in the World have got it wrong by not imposing sales tax on education?

Many countries have no IHT doesn’t mean we have to copy them

There are many countries that levy IHT unlike sales tax in education. Two completely different things. Although I do think that IHT should be restructured in the UK but that’s a different discussion point.

You really really don't get it at all.

Do I feel the most important thing is this? Yes, I absolutely do, my DC is the most important thing to me in this world.

As many PPs said, it's possible to care about many issues.
The problem with VAT on PS is that it affects our own children. People can accept own suffering for the greater good but will never ever forgive or forget those harming their children.

In my case - I cared deeply about many issues you're raising, worked over 60hours /week to be able to cover fees, no car, no holidays, Primark cloths once a year. Never ever takeaway coffee, no Netflix / any subscriptions. All taken by PS fees and mortgage on a tiny shitty London property.
My taxes maintained a few families on benefits though. I was totally fine with this. But apparently it's not enough - you now directly take away from my DC.

This policy now - f..k it. I feel deep rage about all those takers who now throw my SEN DC under the bus. So what I'm doing is moving DC to one of the top grammars in the country (they have sufficient grades and meet criteria), means take the place away from another child, your taxes will fund it now and I'm retiring by Christmas. I'm so used to frugality that I'll be totally fine money wise. My role won't be replaced like for like though - my package was negotiated for my skills specifically.
I'm not alone, there are a number of people in DCs class doing the same.

So enjoy it!
I did care, you made me stop.

Oh, and yes - I don't think I'll be ever able to overcome this resentment, so not a penny to any charities either. Our school had massive charity push to sponsor over 10% of kids on full (100%+) bursaries. Parents are actively stopping this now. Those kids will go to state as well.

What utter bollocks! If Amat if that is true, you’re just embarrassing yourself.

This is the reason why adding VAT onto private school fees is a stupid idea. Those who are just scraping by can no longer attend, making the schools even more exclusive.

Those who can comfortably afford the VAT increase can afford a very good tax advisor. I can assure you, those who can comfortably afford the 20% VAT increase will NOT be paying VAT as there will be a whole tax advisory business set up to find every loop hole for not having to pay by the time it comes in.

It wouldn't surprise me in the slightest if EHCP's for private schools go through the roof to avoid VAT. If you can comfortably afford the increase, you can afford to pay for private reports and find some one willing to vouch your child needs an EHCP and sign off on it. This is the first of many loopholes which will be found. Ultimately, if this is the case it will mean VAT is also added to EHCP students which makes LA even more skint, hence pushing more into safety valve schemes and ultimately meaning provision for students with SEN declines even further than it already is.

I can assure you that those who can comfortably afford the 20% VAT increase will pay it. Some taxes have ways you can legally avoid paying. VAT is not one of them. Tax advisors may be able to help minimise other taxes (IHT, CGT, etc.). They can't do anything about VAT.

This! People who can't afford to eat, or heat their homes and you're asking for a legal way to dodge tax on sending your kids to a private school.

Well said. I am very much on the same path. Not necessarily because of affordability, but I just cannot accept this VAT out of principle. It feels very punitive toward children of a specific group of people who likely already pay a lot of income taxes.