Schools Briefing – Autumn 2024

With the plan to levy VAT on independent school fees and boarding from 1 January 2025, schools now have a number of questions and considerations to make to support their financial future planning.

To begin, Phil Salmon, Partner and Co-Head of VAT, shares an update on what the HMRC draft guidance means for independent schools. The two papers that have been published, which may be subject to change, provide information on VAT registration, and on charging and reclaiming VAT. Phil hones in on various elements of the guidance to include composite supplies, welfare, and bursaries, the changes that will be coming, and how schools will be impacted.

Our first guest author article penned by Jean Tsang, Charity Partner and Head of Education, Richard Jess, Real Estate Senior Associate, and Hannah Bignell, Charity Solicitor, at Bates Wells, gives an overview of some top tips for schools when considering a merger. On the back of the Budget update, there has been an uptick of schools reconsidering their current position, and their long-term vision. This article includes a seven step guide covering due diligence and legal structure amongst others, to ensure the process runs smoothy.

Continuing on with the pressures felt by the introduction of VAT on school fees, Louise Veragoo, Not for Profit Tax Director, gives an in depth account of the direct tax implications of non-educational income. With various ways to generate extra income outside of the core educational offering, Louise considers the benefits of summer camps, room letting and building rental, to name a few, to support schools efforts.

Cyber security and the threat of an attack has been a constant for schools. Our second guest author, Simon Bulleyment, Director at Sibrossa Ltd, describes the trends he is seeing across the sector, the evolving techniques used to launch a successful attack, and gives support on how to plan and implement an Incident Response Plan. As with auditing financial controls, Simon goes on to highlight the importance of taking a similar approach for your cyber security.

Finally, Nick Bustin, Director, sheds light on the Supreme Court ruling on Professional Game Match Officials, and the long anticipated decision concerning the employment tax status of football match officials. This case gives an insight into the outcome, the criteria which must be met to quality for a contract of service, and the final judgement. With the ongoing HMRC off-payroll worker campaign, Nick advises it is important for schools to review all polices and procedures in full.

I hope you enjoy this edition and find these articles both useful, and of interest. Do feel free to let the authors, me or your regular contact know.

Download PDF