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.