'The amount most ISC schools would be able to reclaim in VAT is small, if anything', warns ISC CEO
Julie Robinson, chief executive of the ISC, has responded to claims made by financial advisers that Labour’s VAT policy could see schools claiming back hundreds of thousands of pounds from the Treasury.
Financial advisers have told The Telegraph that tax relief rules would allow independent schools to “soften” the blow of higher fees on parents by claiming the cost of VAT for new developments such as libraries and sports facilities. The money could then be used to pay some or all of the VAT bills on fees that schools are facing under Labour’s tax plans.
Warning that most independent schools would not benefit, Ms Robinson said: “The majority of ISC schools are small day schools – the amount they would be able to reclaim in VAT is small, if anything. In any case, over two-thirds of most schools’ budgets are spent on staff costs, which have no VAT attached to them.
“While it is true that a limited amount may be able to be claimed back by some schools, it is likely that all but the very biggest schools will see that reclaimed amount wiped out by the removal of business rates relief from schools run by charitable trusts.”
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