VAT on school fees
Discussion
Well it's official, yay.
Quick thought re: a loophole, which I'm keen for other thoughts on.
1. Register a new company.
2. Register for VAT.
3. Put the school fees through as training cost. Tax deductible + claim VAT back.
4. Create a taxable income in relation to your child's output. Quite frankly, this could be anything from being a YouTuber to selling lemonade.
Is this within the rules?
Quick thought re: a loophole, which I'm keen for other thoughts on.
1. Register a new company.
2. Register for VAT.
3. Put the school fees through as training cost. Tax deductible + claim VAT back.
4. Create a taxable income in relation to your child's output. Quite frankly, this could be anything from being a YouTuber to selling lemonade.
Is this within the rules?
In substance you’d be setting up your child as an independent contractor earning a living from some fabricated business enterprise, and doing so via a management company. Then having the management company pay for their school fees as a business expense.
I’m no accountant, but at a guess I’d say this is hopeless.
I’m no accountant, but at a guess I’d say this is hopeless.
BlackTails said:
In substance you’d be setting up your child as an independent contractor earning a living from some fabricated business enterprise, and doing so via a management company. Then having the management company pay for their school fees as a business expense.
I’m no accountant, but at a guess I’d say this is hopeless.
Well it's not fabricated. Setup a youtube channel - post content. Get on the creator fund etc. Same for TikTok etc. So the business is legitimate. I’m no accountant, but at a guess I’d say this is hopeless.
I'm a CA...but not a tax specialist. I'm looking for a qualified opinion...not just an 'opinion'.
JJMatrixx said:
Well it's official, yay.
Quick thought re: a loophole, which I'm keen for other thoughts on.
1. Register a new company.
2. Register for VAT.
3. Put the school fees through as training cost. Tax deductible + claim VAT back.
4. Create a taxable income in relation to your child's output. Quite frankly, this could be anything from being a YouTuber to selling lemonade.
Is this within the rules?
Depressing to think that a private school pupil would have to resort to being a YouTuber.Quick thought re: a loophole, which I'm keen for other thoughts on.
1. Register a new company.
2. Register for VAT.
3. Put the school fees through as training cost. Tax deductible + claim VAT back.
4. Create a taxable income in relation to your child's output. Quite frankly, this could be anything from being a YouTuber to selling lemonade.
Is this within the rules?
Simpo Two said:
JJMatrixx said:
Well it's official, yay.
Quick thought re: a loophole, which I'm keen for other thoughts on.
1. Register a new company.
2. Register for VAT.
3. Put the school fees through as training cost. Tax deductible + claim VAT back.
4. Create a taxable income in relation to your child's output. Quite frankly, this could be anything from being a YouTuber to selling lemonade.
Is this within the rules?
Depressing to think that a private school pupil would have to resort to being a YouTuber.Quick thought re: a loophole, which I'm keen for other thoughts on.
1. Register a new company.
2. Register for VAT.
3. Put the school fees through as training cost. Tax deductible + claim VAT back.
4. Create a taxable income in relation to your child's output. Quite frankly, this could be anything from being a YouTuber to selling lemonade.
Is this within the rules?
Even fairly mediocre low-level YouTubers/Twitch Streamers earn enough to not have to work another job. I have a younger work colleague who live streams himself playing 'Call of Duty' type games in his spare time, and he has a 6k subscribers on Twitch, and 25k on Youtube, and was showing me on his app that he's now earning about £2000 a month just from playing his games after work, which is a very nice additional income for him. He's paying off his mortgage at an accelerated rate using the money.
That's someone who puts next to no effort into actually making it pay, but for those that do, the money can be enormous. There are hundreds of excellent channels showing vehicle restoration, vehicle builds, construction, science, DIY, 'How to' guides, and so on, that make their creators an extremely good living. I'm sure you will be aware that the top YouTubers earn millions per year.
Just because you don't understand it, or just because it is 'new', doesn't make it a lesser profession than anything else.
Mont Blanc said:
Simpo Two said:
JJMatrixx said:
Well it's official, yay.
Quick thought re: a loophole, which I'm keen for other thoughts on.
1. Register a new company.
2. Register for VAT.
3. Put the school fees through as training cost. Tax deductible + claim VAT back.
4. Create a taxable income in relation to your child's output. Quite frankly, this could be anything from being a YouTuber to selling lemonade.
Is this within the rules?
Depressing to think that a private school pupil would have to resort to being a YouTuber.Quick thought re: a loophole, which I'm keen for other thoughts on.
1. Register a new company.
2. Register for VAT.
3. Put the school fees through as training cost. Tax deductible + claim VAT back.
4. Create a taxable income in relation to your child's output. Quite frankly, this could be anything from being a YouTuber to selling lemonade.
Is this within the rules?
Even fairly mediocre low-level YouTubers/Twitch Streamers earn enough to not have to work another job. I have a younger work colleague who live streams himself playing 'Call of Duty' type games in his spare time, and he has a 6k subscribers on Twitch, and 25k on Youtube, and was showing me on his app that he's now earning about £2000 a month just from playing his games after work, which is a very nice additional income for him. He's paying off his mortgage at an accelerated rate using the money.
That's someone who puts next to no effort into actually making it pay, but for those that do, the money can be enormous. There are hundreds of excellent channels showing vehicle restoration, vehicle builds, construction, science, DIY, 'How to' guides, and so on, that make their creators an extremely good living. I'm sure you will be aware that the top YouTubers earn millions per year.
Just because you don't understand it, or just because it is 'new', doesn't make it a lesser profession than anything else.
And on 'Just because you don't understand it, or just because it is 'new', doesn't make it a lesser profession than anything else' I can think of many professions greater, more useful and more important than playing computer games, even if it does make £1M a year.
Back to the OP: No, it won't work, because HMRC aren't that daft.
Simpo Two said:
Depressing to think that a private school pupil would have to resort to being a YouTuber.
Lolz. One could set up one's privately educated child as a YouTuber and they can share the immense pain and suffering caused to their parents, hopefully covering the additional 20%...JJMatrixx said:
Well it's official, yay.
Quick thought re: a loophole, which I'm keen for other thoughts on.
1. Register a new company.
2. Register for VAT.
3. Put the school fees through as training cost. Tax deductible + claim VAT back.
4. Create a taxable income in relation to your child's output. Quite frankly, this could be anything from being a YouTuber to selling lemonade.
Is this within the rules?
In what way are the costs wholly and exclusively for the purposes of the trade of the company - no CT deduction otherwise.Quick thought re: a loophole, which I'm keen for other thoughts on.
1. Register a new company.
2. Register for VAT.
3. Put the school fees through as training cost. Tax deductible + claim VAT back.
4. Create a taxable income in relation to your child's output. Quite frankly, this could be anything from being a YouTuber to selling lemonade.
Is this within the rules?
For VAT recoverability in what way are the school fees incurred for the purposes of the company's trade?
TwigtheWonderkid said:
If any parent is struggling to pay their school fees now vat is added, they need to stop buying take away coffee and the latest phone.
My mum died in 2020 leaving almost enough to pay it, which we've been doing.I can't afford another 20%, however if it makes you feel better I'll stop buying food.
dundarach said:
TwigtheWonderkid said:
If any parent is struggling to pay their school fees now vat is added, they need to stop buying take away coffee and the latest phone.
My mum died in 2020 leaving almost enough to pay it, which we've been doing.I can't afford another 20%, however if it makes you feel better I'll stop buying food.
Whenever poorer people cannot afford stuff, young people not being able to buy a house for example, or any of the "have nots" struggling with anything, they're told by the "haves" that if they stopped wasting their money on take away coffee and the latest iPhone, all their struggles would be over.
That was the source of my comment.
JJMatrixx said:
theboss said:
It wouldn’t stand up to the slightest scrutiny.
If it were that simple we’d all be doing it already for anything else we didn’t fancy paying VAT on.
Ok, so what's the technical pitfall that would not allow you to do this?If it were that simple we’d all be doing it already for anything else we didn’t fancy paying VAT on.
"You could call it training" which would be great until subject to any scrutiny by HMRC whose officer won't appreciate your presumption that he/she/it was born yesterday. You might get away with it for many years and then find yourself in a tax tribunal with a hefty 6-figure adjustment to pay plus legal expenses on top.
This is VAT basics... https://www.gov.uk/charge-reclaim-record-vat/recla...
Gassing Station | Finance | Top of Page | What's New | My Stuff