Partner (VAT & Duty) and Head of South East Asia Business at James Cowper Kreston
Meera Rajah heads up James Cowper Kreston’s VAT services and leads their expansion into South East Asia. She has developed extensive technical knowledge over more than 20 years specialising in VAT and adopts a practical approach that has successfully argued against HMRC to achieve substantial VAT savings and compensation for clients.
Her experience is comprehensive, encompassing business restructuring (mergers and acquisitions), VAT cost reduction strategies, international cross-border supply chains, partial exemption methods, land and property transactions, film production, charities, and VAT planning and mitigation. Additionally, Meera assists businesses in disputes with HMRC, drawing on her years of valuable experience from previous roles within the organisation. Her background with HM Revenue and Customs has equipped her with a range of skills and expertise in inspections and negotiations, greatly benefiting her clients.
Labour’s plan to remove VAT exemption from independent school fees
November 3, 2023
Sector: Charities, Not-For-Profit and Education
The UK’s Labour Party has proposed the removal of VAT exemption from independent school fees. This potential update is examined in a recent article by Meera Rajah, partner at James Cowper Kreston. Read the full article here, or the summary below.
Labour’s proposal to remove VAT exemption from school fees
The Labour Party, aiming for office in the next general election, plans to withdraw the ‘eligible body’ status from independent schools, which would consequently subject school fees to the standard VAT rate. This change could see an increase in fees, although not necessarily by the full 20%, due to improved VAT recovery on costs for schools.
Impact on independent schools and fee structures
Independent schools currently face significant restrictions on VAT recovery, which would be alleviated should this proposal come into effect, potentially reducing net school costs. However, the implementation of these changes could be as far off as 2026 or later, and schools are advised to prepare for this possible shift.
Strategic financial planning for schools after the lifting of VAT exemption from school fees
The article also explores strategic financial planning in anticipation of these changes, such as the timing of fee payments. Prepayment options may offer a method to circumvent immediate VAT charges, providing a compelling incentive for parents.
The complexities of VAT recovery for educational institutions
The ramifications of the proposal extend beyond fee adjustments, with the possibility of increased VAT recovery from major capital expenditures, thanks to the Capital Goods Scheme. It’s a nuanced forecast that requires careful consideration by school leaders, who must remain vigilant for updates and guidance on the matter.
Preparing for potential changes in UK VAT legislation
The full implications of the Labour Party’s potential policy shift, including the calculated £1.7 billion in additional tax revenues and improved VAT recovery for schools, are detailed in the full article. Independent schools and stakeholders are encouraged to read the complete analysis at James Cowper Kreston’s website to prepare for the potential financial landscape ahead
If you would like to talk to someone about the tax on independent school fees, please get in touch.