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Some of the richest private schools in the country could have found a way to cash in on new VAT rules – and it could cost the taxpayer billions.
A document issued by HMRC on Thursday made clear that, once registered for VAT, independent schools will be able to claim back the tax they have paid on capital projects such as buildings and land acquisition completed over the past 10 YEARS.
The money would be paid back progressively over the next decade, with the timing and amounts dependent on when the project was finished.
According to reports in the Observer, the move could benefit richer institutions more than the smaller private schools.
One senior figure in the independent sector told the newspaper: “The higher echelons of the independent school sector are staying very quiet – they will be rubbing their hands [in the hope that] this is put in place as soon as possible.
“It is very public that Eton will be passing through the full 20 per cent of VAT to parents, as will many of its peers.
“They will also be able to now claim VAT back on operating costs and are developing significant capital projects on which they will also be able to claim the VAT back.
“In short, the taxpayer will now be funding 20 per cent of their running costs and capital projects. It is a windfall gain to the privileged independent schools at the expense of the taxpayer.”
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