Avoiding VAT on school fees – the risks parents and schools are taking
In this article, Dan Niedle lays out the risks of pre-paying school fees to avoid paying VA T if introduced by a future Labour Government.
Multiply the termly costs by three and you get the annual costs, these are no mean commitments for parents and grandparents.
Dan mainly focusses on “anti-forestalling” measures that Government can take to negate any gains from pre-payment. I would add that there is credit risk too. You are pre-paying for services to schools whose covenant may not be entirely sound and whose covenant would be seriously weakened should there be a change in the VAT position on fees.
See also this free link to an excellent FT article by Anna Gross (if the link has expired you can contact me at henry@agewage.com for a fresh one.
I appreciate this is not a pension topic, but many pensioners pay school fees for their grandchildren and this is important stuff.
It does impact on pensions as this is yet another attack on those that pay the bulk of income tax. With the non-dom already moving out the ATED homes on the market the burden of tax will fall on those above the 22 million who don’t earn enough to pay tax.
The poor will find that public services are reduced ( even more)
Public debt roll over is going to come from where? The pension funds?
They are all connected it is not a two dimensional world