Settle a private school/VAT argument.

[anothertediousquestion]

I'm Irish and my parents live in Cork in Ireland. Education is not vatable in Ireland. My parents very kindly pay for my son to go to private school here in England, and they're convinced that if the school invoices them at an Irish address, because education is not vatable in Ireland, the school does not have to add VAT.

While this would be lovely if they were right, my understanding is that if the school is in England, and the service (i.e. the education) is being delivered in England, the VAT must be applied.

I'm right, surely?

Unless the school sets up an arrangement where the fees are paid in Euro in the Republic then the VAT is payable.

It used to be possible in some circumstances for non-residents to recover VAT paid in the UK but I think it was focussed on retail and intended to incentivise sales.

No idea - a good thought though!

BUT I hope you’ve got your hard hat on as the dementors are about to descend on this thread screaming blue murder 😂😂

My understanding is that they’d still have to pay the VAT because the place of supply is the UK.

https://www.farrer.co.uk/news-and-insights/vat-on-school-fees-qa/#:~:text=Would%20VAT%20be%20charged%20to,the%20location%20of%20their%20customer.

“Would VAT be charged to parents who are based overseas?
Yes. The general rule for supplies of services which are made by a business to a consumer is that the place of supply is where the supplier belongs, irrespective of the location of their customer.”

Oh I know! Probably won't help if I reply that the state education I got for free from the nuns in Cork is basically what we have to pay through the nose to get here in England. Lots of nice things about living here, but good lord, the state education is not one of them (unless you are rich and live in a swish catchment, which we do not!).

I think they might be thinking of reverse charge vat which isn’t applicable since we left the EU

@Another76543 Thank you! I'll send them that. They're being so incredibly generous, and of course I feel awful that this change is happening (and I voted Labour!), but I don't want them digging in on this issue.

Place of supply would be England so I think VAT would be payable whoever is paying the fees

You are right OP.

VAT is payable because of where the service is provided.

The whole policy is very annoying (and entirely pointless). Some schools are offering pre-payment plans as there may be a possibility it could avoid the VAT depending on how the policy is worded/implemented. It might be the only hope of avoiding the VAT!

Otherwise I'd be first in line setting up a company in the Republic to pay our fees!

@Another76543 Yes - this is what they will do, I think. My mother just copied me in on an email she sent to the bursar this morning asking for an invoice for the whole year for next year, so they can pay now, and also asked him about the Irish invoice address etc. then, which is how it came up.

This is the page on the government website that I assume is pertinent: https://www.gov.uk/guidance/vat-how-to-work-out-your-place-of-supply-of-services

it doesn’t matter where the invoice payer lives, if education is delivered in the UK the vat will be payable. It’s partly why they are doing it. Because many rich non-resident families will think nothing of paying it.

The place of supply is the UK, it is irrelevant in this case where the person is that is paying - so the VAT will be due

It is also very likely that when they bring in the VAT on school fees they will close the prepayments loophole, and this would be retrospective

@PickledPurplePickle Thank you. I think the retrospective thing is shaky, because until they announce it, it's not real. It will either come in when they announce, or when it comes into law. If you can prepay before they announce, you should be fine.

Private schools have loads and loads of overseas students. They will definitely add VAT if this policy does come about.

Thank you everyone for answering my question!

You voted labour whilst accepting the generosity of your parents knowing the effect it would have on them?

I think you ought to be covering the additional fees yourself and not expecting your parents to pay more.

LookingforMaryPoppins

Let's try and have a wee guess at the OPs motivation for voting Labour ?

Perhaps it's because she is not entirely self absorbed ?

Maybe she worked out that whilst one Labour policy will have a financial cost to her extended family, (which it sounds like it can be easily afforded) it didn't outweigh the huge advantages a Labour government would bring to the country as a whole.

I know it difficult to comprehend but there are some of us that know how privileged we are to afford private education and completely understand and support the VAT increase .

We also voted Labour as we support higher taxes for those with the broadest shoulders in return for better funded public services for all.

@@thefishingboatbobbingsea Thank you and sorry for missing your kind reply at the time! You're quite correct. We send our son to private school because the local state schools are quite literally falling apart (I ran the PTA at our local state primary for many years and it was jaw-dropping), and the teachers are under intolerable pressure, and have been for my child's entire life in this country.

I voted Labour because I hope that the changes they bring about will mean that the kind of education that costs around £20k a year now will be the default for ALL young people some day, and that when my son is sending HIS children to school, he will be amazed at the idea that you once had to pay to get a top quality education in England.

I don't think that's a complicated idea, surely?

I really admire people who stick to their principles when it comes to other people paying taxes or having to move their child out of school, sometimes you’ve got to do your bit.