Vocational schools and VAT

[KeenButClueless]

The government have published their plans to add VAT to independent school fees, including vocational schools.

I’m devastated for my daughter. Her future is in tatters. We’re already struggling to pay our contribution for the MDS scheme and simply can’t afford another several thousand on top.

She’s going into year 11 and we’re facing having to move her mid year in such an important year.
 

[Medora]

I feel for you. We are in a similar position. Making big changes to our future plans 

[Pas de Quatre]

I am still hoping that this won't go ahead once they have looked beyond the soundbites and done some figure crunching.  The 20% would not go straight to the tax authorities, as any VAT incurred on outward payments, e.g. heating, lighting, will be deducted first. It seems there will be great disruption to many people's lives with less gain than anticipated.

[KeenButClueless]

5 minutes ago, Pas de Quatre said:

I am still hoping that this won't go ahead once they have looked beyond the soundbites and done some figure crunching.  The 20% would not go straight to the tax authorities, as any VAT incurred on outward payments, e.g. heating, lighting, will be deducted first. It seems there will be great disruption to many people's lives with less gain than anticipated.

I hope you’re right.

[Medora]

1 hour ago, Pas de Quatre said:

I am still hoping that this won't go ahead once they have looked beyond the soundbites and done some figure crunching.  The 20% would not go straight to the tax authorities, as any VAT incurred on outward payments, e.g. heating, lighting, will be deducted first. It seems there will be great disruption to many people's lives with less gain than anticipated.

My children’s school said something about how the vat is charged to the parents and not the school, so no deductions can be made by the schools. Anyone know anything further about this?

[Medora]

Labour have also made it clear that boarding schools will have to charge vat on ‘closely related boarding services’ and will make sure that there is no ‘value shifting’ - I know some boarding schools discussed moving some costs to the boarding side to keep the tuition cost and hence vat lower but no such luck

 

They also state that vat is chargeable to extra curriculars such as performing arts and sports clubs… 

[The red shoes]

It’s all looking very depressing 

[Hannah 78]

So how does this affect those with MDS? This all confuses me as I can’t work out what the direct impact is for MDS as not paying full value . 

[KeenButClueless]

I’m going to email the address listed on the published materials to ask about how this impacts the MDS. 

[Hannah 78]

Thanks. 

[WhereToNow]

I suggest as many of us start to email

our MPs and the email address taken from the proposal……

Edited July 30 by WhereToNow
spelling

[Hannah 78]

Happy to email. Is anyone good at drafting letters like this and could do a proforma that people can adapt? 

[WhereToNow]

I’m working on it, but any input from anyone in the industry would be great 😊

[KeenButClueless]

There’s a group on Facebook called Education not Taxation which is worth a follow, as is signing the petition: https://chng.it/zsjf6hg2KX

 

[Tiaramum]

Signed the petition and will happily email if anyone can put together a good letter. 

[Peanut68]

13 hours ago, KeenButClueless said:

She’s going into year 11 and we’re facing having to move her mid year in such an important year.

Not the complete solution I know but I do know that any bursary funding etc that individual schools hardship funds /charitable bodies linked to schools/other charities will most usually always prioritise assisting those in pivotal academic year groups which year 11 - being GCSE year - most certainly is. Your dancer deserves to finish their GCSE education where they are now - no one would ever advocate changing schools in that year. Success in GCSE’s is so important for any next steps both in & out of dance world as any higher studies (including in dance) does expect minimum 5 GCSE passes including English & Maths (🤷🏻‍♀️)

Swapping schools can entail different exam boards & learning a whole new academic syllabus in some subjects (talking from painful experience here). 

TALK TO SCHOOL BURSAR ASAP & ask for assistance from their ‘Hardship Fund’ & stress that otherwise you may have to withdraw pupil. Many other families will also be approaching them & theres only so much money to go around….. year 11/13 I suggest will & should always be priority.

Good luck  

Edited July 30 by Peanut68

[Medora]

Is the vat on sports and other activities too? We just got my son’s invoice for hockey next year and they added 20%, saying it was due to the new legislation. I’m so confused 

Edited July 30 by Medora

[Trumpeting Violinist]

Yes, it's for all activities.

 

https://assets.publishing.service.gov.uk/media/66a7a1bdce1fd0da7b592eb6/Technical_Note_-_DIGITAL.pdf

[Hannah 78]

I find this so confusing. So is it backdating VAT to July 2024 ? 

[bangorballetboy]

12 minutes ago, Hannah 78 said:

I find this so confusing. So is it backdating VAT to July 2024 ? 

 

No.  It's an anti-avoidance measure - any payment made after 29 July 2024 (i.e. yesterday) in respect of any period after 1 January 2025 will be subject to VAT.

[KeenButClueless]

4 hours ago, Peanut68 said:

Not the complete solution I know but I do know that any bursary funding etc that individual schools hardship funds /charitable bodies linked to schools/other charities will most usually always prioritise assisting those in pivotal academic year groups which year 11 - being GCSE year - most certainly is. Your dancer deserves to finish their GCSE education where they are now - no one would ever advocate changing schools in that year. Success in GCSE’s is so important for any next steps both in & out of dance world as any higher studies (including in dance) does expect minimum 5 GCSE passes including English & Maths (🤷🏻‍♀️)

Swapping schools can entail different exam boards & learning a whole new academic syllabus in some subjects (talking from painful experience here). 

TALK TO SCHOOL BURSAR ASAP & ask for assistance from their ‘Hardship Fund’ & stress that otherwise you may have to withdraw pupil. Many other families will also be approaching them & theres only so much money to go around….. year 11/13 I suggest will & should always be priority.

Good luck  

Thank you - your response has made me well up a bit! I have already asked the school for support and am waiting for a response.

[coniger]

My DS left the vocational system and now goes to a boarding school.  We have been advised by the school they will “swallow” 5 percent so we will be liable for 15 percent rise instead - still a huge amount but worth asking the individual schools 

[Chira]

19 hours ago, Pas de Quatre said:

I am still hoping that this won't go ahead once they have looked beyond the soundbites and done some figure crunching.  The 20% would not go straight to the tax authorities, as any VAT incurred on outward payments, e.g. heating, lighting, will be deducted first. It seems there will be great disruption to many people's lives with less gain than anticipated.

It will definitely go ahead. It’s planned for January 2025. And Rachel Reeves has said that parents cannot pay fees in advance to try and avoid the increase. So it’s going to happen and it’s about how much each school is going to absorb before they increase their fees.!

Edited July 30 by Chira

[Legseleven]

Given that the only vocational schools are independent (save for Dance School of Scotland and the privileged position Scottish students have with that - similar to the privileged position the areas with grammar schools are in) it does seem to be a penalty for talented children who have places at vocational school. Not an attractive policy. 

[glowlight]

5 hours ago, Medora said:

We just got my son’s invoice for hockey next year and they added 20%, saying it was due to the new legislation.

 

As others have pointed out there is provision in the technical guidance for VAT to be applied on services billed now but which will be delivered after January 2025, however I wonder if they can actually add VAT to the invoice if they are not VAT registered.  Is the school VAT registered already? There should be a VAT registration number on the invoice if it is. If not I would query with them whether they can charge VAT at this stage.

[Millicent]

I don't understand how they can do this when the MDS calculations for the next academic year have already been finalised? Are they just going to add an extra 20% to invoices from Jan? Or adjust the MDS? 

[Chira]

1 minute ago, Millicent said:

I don't understand how they can do this when the MDS calculations for the next academic year have already been finalised? Are they just going to add an extra 20% to invoices from Jan? Or adjust the MDS? 

They might add the increase onto the end of year invoice as a separate bill; rather than adjust the incoming MDS thresholds. 

[Pas de Quatre]

For those of you on Facebook, Royal Ballet and Opera have just posted a picture of a visit today by the Secretary of State, Lisa Nandy MP. I have left a robust comment about VAT, others might like to find the RB&O post and add their views.

Edited July 30 by Pas de Quatre
Add full name

[Millicent]

21 hours ago, Pas de Quatre said:

I am still hoping that this won't go ahead once they have looked beyond the soundbites and done some figure crunching.  The 20% would not go straight to the tax authorities, as any VAT incurred on outward payments, e.g. heating, lighting, will be deducted first. It seems there will be great disruption to many people's lives with less gain than anticipated.

Honestly I don't think the money raised or not raised will make a difference. This is an ideological tax.

[Chira]

I’m not sure why the link wont  open, but this info is up on the govt webpage. Answers some questions raised here.

Edited July 30 by Chira
Corrupt link

[WhereToNow]

16 minutes ago, Pas de Quatre said:

For those of you on Facebook, Royal Ballet and Opera have just posted a picture of a visit today by the Secretary of State, Lisa Nandy MP. I have left a robust comment about VAT, others might like to find the RB&O post and add their views.

No comment on there now…..in fact no comments whatsoever…..unless it’s just me?

[Chira]

5 minutes ago, WhereToNow said:

No comment on there now…..in fact no comments whatsoever…..unless it’s just me?

The comment is there you just need to select ‘all comments’

[Raquelle]

My dd is going into year 10 in a vocational school...feeling really stressed about it. She's chosen her options and starting gcses this year..we are at our financial limit even with mds, and have sacrificed so much so cannot justify any more money towards her schooling (when we have other children - and there isn't job security at the end....that's another story!). Feel really heartbroken as she loves her school. It's been a wonderful experience for her. There is NO vocational option local to us, so i can't even imagine how we could continue this journey if we have to pull her out. Council schools are all full! I couldn't sleep last night with the worry about it all....very sad for all the lovely talented dancers who are being affected 😔