How Outsourced Facilities Maintenance Provides Relief Following the End of the Private School Tax Exemption
With the end of the private school VAT exemption, these schools are obliged to pay 20% VAT for fees and educational charges as of 1 January 2025. However, with a fairly clear idea of what’s to come, it’s time for schools to prepare for the change.
Debate on the effect of this has been extensive, with speculations including withdrawals of children from private schools en masse and school fee price hikes. There has equally been an argument that, while schools will be required to charge 20% VAT on their fees after 1 January 2025, VAT recovery means this may not be passed on completely.
In this blog, we take a closer look at the new tax requirements for independent schools and examine the benefits of working with a facilities maintenance company.
Who is affected by the VAT requirements on private schools?
- Independent schools and further education (sixth form) colleges that provide full-time education in exchange for fees.
- Fees paid from 29 July 2024 for services provided for 1 January 2025 and any period thereafter will be subject to VAT. Pre-paid fees for the period from 1 January 2025 will be scrutinised by HMRC and may be liable for tax depending on the pre-payment arrangement.
- Charitable private schools no longer enjoy charitable business rates relief from 1 April 2025. This provides the 80% discount they have received on their premises.
- Parents who send children with special needs and disabilities to private schools may have to pay 20% VAT on their fees. This will depend on the advice of a local authority funded Education, Health, and Care Plan.
How can private schools recover VAT now that the exemption is over?
Every private school affected by the change must assess their finances and come up with ways to mitigate risk and optimise spend. Ultimately, it will be up to each school to determine how they will fund their new tax liabilities. VAT recovery is an important consideration that affects budgeting.
Many schools employ internal maintenance personnel and maintenance operatives. However, outsourced facilities maintenance is a high-value way for schools to recover VAT and optimise their maintenance solutions.
Capital expenditure projects from the last ten years may also be recoverable and schools are encouraged to investigate whether these can be claimed back.
Beyond tax recovery: the top benefits of working with a facilities maintenance company for private schools
- Claim VAT back, which will affect budgeting and cashflow.
- Minimise risk by transferring liability and exposure to an external party for compliance requirements.
- Work with one company for a full suite of maintenance solutions. Call our trusted team for all your centralised needs.
- Full visibility and control over your school maintenance. Log into our client portal to show past and upcoming maintenance jobs, reactive maintenance tasks and follow-ups, and all compliance processes with access to certification.
- Achieve precision maintenance with IoT. Use data insights to fine-tune maintenance processes, predict and identify issues – and expedite action. This also allows for automation around traditionally labour intensive and time-consuming tasks like tap testing. This frees up staff for other tasks, ensures accurate and consistent processes, and saves costs.
- Reliable, fast emergency callouts. 365/24/7 emergency response with a four-hour turnaround time and 96% first-time fix rate.
- Energy Management – Smart meters and management processes for maximised efficiency and costs savings.
- Access Control and Security – Safeguarding teachers, students, and assets.
- Compliance, Health, and Safety – One team to handle everything: accredited inspections, scheduling, record-keeping, and reporting. All our engineers have been checked against the enhanced DBS register. These checks can be viewed online or copies of the physical certificates can be provided.
- Reduced Expenses – Professional building management that’s on budget, ensures optimal performance and mitigated costs.
- Estate Management – To create neat and tidy grounds and support your high-profile offering.
Case Study: Salvatorian College
“We approached Voltix in spring of 2020, as we were taking ownership of a brand new school from the main building contractor.
We are on a school’s Whatsapp group that is used to share best practice. Voltix were recommended by the group as they were maintaining some of the school buildings in the area.
We enrolled Voltix to assist with the maintenance of a brand new electrical plant and equipment worth 100s of thousands of pounds. Their experience was highly beneficial, providing us with key input before the defect period of the new electrical plant had ended.
We found that Voltix had the technical expertise to resolve all the issues arising, and awarded them a maintenance contract to provide planned and reactive maintenance – covering all aspects of compliance from gas boilers, renewable energy to lightning conductor maintenance. The school is now approaching the end of the 3-year contract and has benefited from excellent service by the Voltix team, we are positive that this will continue going forward.”
Work with Voltix, the problem-solvers
Contact Voltix Services today to find out more about our tailored solutions and the benefits for your school.