VAT on school fees - the risks schools are taking

We wrote in January about some of the ways private schools might try to avoid Labour's proposed 20% VAT on school fees. One approach we mentioned - paying years' of fees in advance - is now being widely used. We are concerned that schools and parents are not fully understanding the risks that these advance fee schemes create. Parents are being warned about the possibility of retrospective legislation - but a far worse prospect would be a challenge under existing law, and years of litigation.

We’ve a short report explaining the risks, and suggesting how the Labour Party, HMRC and schools could prevent a protracted period of uncertainty, and the potential for schools and parents to face significant unexpected costs.

Our report is here, and there is FT coverage of the issue here.