Recent research highlights the significant impact the VAT on private school fees could have. The study analyzed responses from 2,000 HNWIs and found that 993 parents had children attending private schools.
For more information on VAT on Private Schools, Get in touch with Sterlingwells.
Who Will Be Impacted, and How?
Recent research highlights the significant impact the VAT on private school fees could have. The study analyzed responses from 2,000 HNWIs and found that 993 parents had children attending private schools.
For more information on VAT on Private Schools, Get in touch with Sterlingwells.
Implementation Date and Affected Services
Currently, education services and closely related goods and services provided by eligible bodies are exempt from VAT. Amongst the eligible bodies are private schools, who are regulated by virtue of needing to register with the government and be inspected regularly. As a result, private schools have been able to offer education and boarding services without adding VAT to their fees. This exemption has allowed private schools to operate with a financial advantage compared to other sectors.
Are HNWIs Unhappy with VAT on Private School Fees?
According to an expert, the government’s decision to add VAT to private school fees is largely unpopular among wealthy families, particularly because it will take effect in January rather than at the start of the next academic year.
Even before this announcement, rising costs in recent years have already been putting pressure on parents, making it harder to afford private education.
The accounting for VAT on private schools will apply as for other businesses; VAT paid on taxable purchases will be deducted from the VAT collected on revenue, with the balance payable to HMRC.
