Hello everyone,

Hope this finds you well.

I've just read an article about some parents with children in private schools paying fees in advance to beat Vat on school fees introduction next year.

So some schools have billed for future periods now and therefore avoided charging vat. Parents have paid and thus the schools are sitting on significant deferred income. 

Is this not tax avoidance on the part of the parents where the school is an accomplice? Yes, legal but still tricky.

Also, if say in a few years (within prepaid period for parent), the parent wants to move the child to a different school (say due to relocation), wouldn't then the school be forced to raise a credit note and inadvertently 'recover' Vat on the credit note?. In which case the government lose out? Also the parent would get more than they paid? I'm guessing this is the 'tricky' bit of this particular type of tax avoidance.

Thanks.

Farouk