Following on from comments in a similar vein from the ATT last week, the CIOT has released its response to the UK Government proposal to remove private school fees from the VAT exemption, agreeing that delaying implementation to the start of the September 2025 would be a sensible modification: ‘It would appear pragmatic to implement the VAT liability changes after the end of the summer term to provide enough time for HMRC and schools alike, as well as not causing a possible change in school for pupils part way through the school year and in some cases during their exam years.’
The CIOT urges HMRC to clarify the definition of ‘institution’ to ensure the rules avoid capturing unintended parties, suggesting that a list of excepted institutions would provide such clarity.
One unintended consequence could affect ‘modest income’ families where a parent whose employment in the public sector requires overseas travel (e.g. armed forces) and private boarding school fees are funded in part by the employer. The employee’s contribution would increase because of the addition of VAT.
The CIOT notes the proposed removal of mandatory business rates relief for private schools, and asks whether discretionary relief would be retained: 'In other words, clarification is requested as to whether a local authority will be able to exercise their discretion to award up to 100% relief to a qualifying private school in the local authority area that satisfies the requirement of benefiting the local community.'
Note: this news item has been amended to remove a reporting error concerning the CIOT's views on business rates in the paragraph above.
Following on from comments in a similar vein from the ATT last week, the CIOT has released its response to the UK Government proposal to remove private school fees from the VAT exemption, agreeing that delaying implementation to the start of the September 2025 would be a sensible modification: ‘It would appear pragmatic to implement the VAT liability changes after the end of the summer term to provide enough time for HMRC and schools alike, as well as not causing a possible change in school for pupils part way through the school year and in some cases during their exam years.’
The CIOT urges HMRC to clarify the definition of ‘institution’ to ensure the rules avoid capturing unintended parties, suggesting that a list of excepted institutions would provide such clarity.
One unintended consequence could affect ‘modest income’ families where a parent whose employment in the public sector requires overseas travel (e.g. armed forces) and private boarding school fees are funded in part by the employer. The employee’s contribution would increase because of the addition of VAT.
The CIOT notes the proposed removal of mandatory business rates relief for private schools, and asks whether discretionary relief would be retained: 'In other words, clarification is requested as to whether a local authority will be able to exercise their discretion to award up to 100% relief to a qualifying private school in the local authority area that satisfies the requirement of benefiting the local community.'
Note: this news item has been amended to remove a reporting error concerning the CIOT's views on business rates in the paragraph above.
