Parents are increasingly prepaying up to seven years of private school fees in response to Labour’s plan to impose a 20% VAT on school fees. This surge in prepayment schemes has raised concerns among tax experts about potential legal challenges from HM Revenue and Customs (HMRC) in the future. Schools offering these schemes could face significant tax liabilities, which might lead them to pass on costs to parents. The practice has become more widespread recently, with schools adopting these schemes as a perceived strategy to avoid the VAT on private school fees.
Paying Private School Fees Years Ahead may Create VAT Disputes, Experts Warn
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