With VAT on school fees a cloud on the horizon, VAT specialist, Rupert Moyle, takes a look at some of the potential implications and outlines some of the things to consider when looking at ways to minimise exposure.
“Independent schools are currently exempt from charging VAT on school fees. They are “eligible bodies” in VAT legislation. Exemption also extends to all goods and services that are “closely related” to the provision of education, such as catering and boarding for pupils, educational school trips, sporting facilities and certain classroom items. In practice this means that most schools are not registered for VAT and are unable to reclaim VAT on expenditure.
There is a cloud on the horizon which bursars and governors will be well aware of. That is the potential for the addition of VAT to school fees should the Labour Party succeed at the next General Election and implement their intended policy…”