Q&A: reclaiming VAT on private school fees

Under the VAT on private school fee rules, is it possible to treat the payment as a charitable donation? Steven Cosgrove, head of VAT at Croner-i VIP explains the rules

Q: In relation to the rules for private school fees recently introduced, if the client pays private school fees to a private school registered as a charity, will these be classed as charitable donations? Alternatively, is there a way the business can pay the fees and claim VAT?

A: It is unlikely the payment to a private school for fees in relation to private education would be classed as a donation.

The HMRC VAT manual VCHAR9200 explains that donations are outside the scope of UK VAT when provided freely.

However, what the client is suggesting constitutes a transaction for VAT purposes.