Paying private school fees through limited company and VAT

Paying private school fees through limited company and VAT

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red_five

Original Poster:

13 posts

233 months

Saturday 30th September 2023
quotequote all
Surprised that this one hasn't been asked already, but I've searched to no avail so here goes.

I understand that it's allowed for a company to pay an employee (or director's) child's private school fees. These are not tax deductible and personal tax is still due. so there isn't an advantage for the employee to do this.

However, if (when) Labour enact their policy of forcing indpendent schools to charge VAT, a VAT registered company can claim back this input tax. The net cost to the business is then the fees without VAT. Is that the cost that the employee pays?

red_five

Original Poster:

13 posts

233 months

Sunday 1st October 2023
quotequote all
If the company pays the school fees on behalf of the director/employee and declares this as a BIK via the P11D, surely this becomes a business expense?