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School Fees

School Fees on behalf of Teachers own Child

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Different topic from the usual Covid-19 senarios.

What are the tax options when a teacher in a school where their own child attends wants to receive a discount or subsiby of their child school fees? I am wanting to understand from both the Teachers PAYE and Schools PAYE and Corporation Tax implications (the school is a private Ltd company).

Any thoughts would be appreciated.

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By Wanderer
19th May 2020 12:14

Pepper v Hart

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Replying to Wanderer:
Scooby
By gainsborough
19th May 2020 12:48

Ah....you've taken me back to my studying days there...

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By the_drookit_dug
19th May 2020 12:58

Salary sacrifice used to be an option, but this has now been removed.

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paddle steamer
By DJKL
19th May 2020 13:04

https://johnstoncarmichael.com/documents/general/Independent_Schools_New...

There is a useful snip about usually acceptable discounting in the part mentioning salary sacrifice. (85%)

Whilst I have not used JC re this area of tax I have/do use them for other tax planning and have been satisfied with their advice; they are the largest independent firm in Scotland.

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By Graham26
20th May 2020 08:54

Thank you for your responses.
What would be your views if the school fee discount was given in place of salary?
I understand Pepper v Hart was just looking in to the discounted school fee as a BIK and Hart was presumably paid a "full" salary.

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Replying to Graham26:
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By Tax Dragon
20th May 2020 09:49

Dug has already mentioned that idea. In such cases, s203A ITEPA removes the tax charge on the BIK and substitutes a tax charge on the salary that's been given up for the privilege of receiving the discount.

That's a simplistic statement. But if you are basing your thinking on internet forums, simplistic is the best you are going to get. Much more sensible to take rounded advice specific to your situation that you (/the school) pays for and for which you can hold the advisor to account.

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Replying to Tax Dragon:
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By Graham26
20th May 2020 11:38

Many thanks for the reply. Simplicity is exactly what I am looking for, so I can gain a consensus with my own thoughts about this. Thanks again for your help.

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