Will there be a retrospective VAT charge on school fees and who will foot the bill? Legal director from the charities and independent schools team at law firm Moore Barlow, Paul Ridout, considers whether backdated taxation is likely to happen.
“One of the questions that has rumbled in the background of the debate about independent school fees is whether a new government might seek to make VAT payable on fees that parents have paid to schools earlier than required by the usual contractual arrangements, even if those payments were made before any formal announcement by a new government of the changes it proposes to make to the VAT rules.
The possibility of retrospective taxation has always been present in the background and it has been discussed in relation to independent school fees from time to time ever since Labour announced its plans to end the VAT exemption…”