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bigduckontax
bigduckontax, Accountant
Category: Tax
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Hello, are there any tax benefits in paying school fees directly

Customer Question

Hello, are there any tax benefits in paying school fees directly from the business to an independent school. I'm a director of a limited company and was interested to find out the most efficient way of doing this. Thanks.
Submitted: 3 years ago.
Category: Tax
Expert:  bigduckontax replied 3 years ago.
Hello, I'm Keith and happy to help you with your question.

Sorry, absolutely none whatsoever, unless, of course, part of the business is actually dedicated to funding education which, in the case of a company, is much easier to arrange as Articles these days are so widely drawn. If this is done then the profits of the company will be reduced and exposure to Corporation tax minimised. However funds for other expenditure will be restricted as a result. This assumes that either you are the sole owner of the company and if not the other shareholders agree to these arrangements.

As far as you personally are concerned your pocket will be relieved of the necessity to fund fees!
Customer: replied 3 years ago.

Thanks for your swift response, very useful. So let me re-phrase the question? What tax liabilities will the company have to pay/declare if I did this? As it stands, I am a basic rate tax payer so if I increase my salary/dividends by adding the school fees to it, I would be in the higher rate tax band. If the company pays the school fees, is this seen as a supplement to my income and therefore would still be in the higher tax bracket? Is this even a feasible option or should I just forget about it? I

Expert:  bigduckontax replied 3 years ago.
Frankly I would forget about it. The question of school fees being met from outside a taxpayer's remit is a standard one on tax forms and if answered in the positive will be added to your income and taxed accordingly. School fees, like taxes, will always be with us. I spent a small fortune on my daughter's education, but it paid off; she's a Doctor of Engineering now, no less.
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Expert:  bigduckontax replied 3 years ago.
Thank you for your support.

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