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HMRC plans new private school tax grab

  • Tax authorities are reviewing early payment deals at private schools to assess potential misuse of pre-payment arrangements to avoid VAT on fees.
  • Chancellor Rachel Reeves announced that advance payments made from July 29, 2024, would incur VAT, raising potential concerns about pre-payment plans.
  • Ministers expect lengthy legal disputes between the tax authority and independent schools regarding VAT obligations.
  • Tax investigations by HMRC may take years to complete, leaving families susceptible to significant unpaid VAT demands long after payments are made.
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The Telegraph broke the news in London, United Kingdom on Tuesday, August 5, 2025.
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