VAT on private school fees
One of the most talked about tax topics ahead of the election was Labour’s pledge to introduce VAT to private school fees.
The new chancellor Rachel Reeves outlined her plans for Labour’s Private Schools tax along with announcing the date of the upcoming budget on 30th October.
In the technical note that has been released it has confirmed that VAT on private school fees and boarding will come into effect from 1st January 2025 and that the 20% rate will also apply to pre-payment of fees. Like with most of these types of changes to policy there has also been an anti-forestalling measure put in place which is effective from 29th July meaning that any fees paid between now and 1st January relating to terms starting from 1st January will also be subject to VAT.
Within any proposed changes there are always technicalities with one of the areas within this aspect of education is how this may affect pupils with acute functional needs. We are sure this will be a point for further discussion. The technical note states that this tax measure will not affect these pupils “where their needs can only be met in private schools”.
Whilst not related to VAT it was also confirmed that reliefs in regards to business rates are to be removed from these schools also. So with VAT having an impact on parents, there is also the potential increased cost basis for the schools from business rates.
It will be interesting to see how this measure goes alongside other items that will be announced as part of the Budget on 30th October.
If you are concerned about this or just wish to get in touch with us, then please contact us below on:
01249 816810
info@riverviewportfolio.co.uk
