Labour’s tax raid on private tuition fees is in disarray as school heads have been unable to register for VAT on the official UK tax website.
Schools logging on have been told they must have a ‘company number’ to register, but because they are charities they do not have one.
It left schools spending hours trying to navigate the system via HMRC’s live webchat, with one adviser even admitting: ‘we don’t seem to have the systems in place’.
After being contacted by the Daily Mail, HMRC said it had issued new training to its advisors this week on how to handle the situation.
This involves registering online as a ‘charitable incorporated organisation’.
The chaos comes just weeks before the official implementation date for VAT on fees, on January 1.
Private schools have been warning that the date, which falls directly in the middle of the school year, does not give them time to prepare.
One adviser admitted to an accountant working for a school: ‘We don’t seem to have the systems in place to facilitate what we are requesting fee paying schools to do.’
The adviser also suggested the problem was widespread, leading to delays in queries being answered via email.
They added: ‘This is why there is probably a delay due to the demand on the email account because everyone will be asking the same question as yourself.’
The adviser spent almost an hour trying to resolve the problem by asking various colleagues, but in the end could not help.
They admitted they were ‘frustrated’ and added: ‘There comes a point when enough is enough.
‘Surely most fee paying schools must be in a similar position as yourselves, registered charities, so this situation should have been pre-empted.’
It comes after the Independent Schools’ Bursars Association (ISBA) said the implementation date should be extended until September 1 2025.
ISBA pointed out it had been advised by HMRC not to even register for VAT until after the budget on October 30.
David Woodgate, ISBA’s chief executive, said: ‘Independent schools…have only a very short window in which to implement labyrinthine new rules and regulations.’
It was also claimed that the ISBA tried to warn HMRC that parts of its guidance on complying with the tax were ‘inadequate and incoherent’, but was ignored.
Mr Woodgate added: ‘It is not too late for the government to make a rational, pragmatic decision to defer implementation until next September, in the best interests both of schools and HMRC who clearly need more time to get their systems and processes up to speed and enable finance teams in schools to comply with the new regulations.’
A spokesman for HMRC said: ‘We have provided clarification to private schools on what reference numbers are required to register for VAT. We have also updated guidance on gov.uk.’
Labour says the controversial tax will pay for 6,500 extra teachers for the state sector.
It says private schools should absorb some or all of the cost so that it is not passed on to parents via fee rises.
However, many schools have already said they will have to raise fees, and many families will not be able to afford it.
Tens of thousands of pupils are expected to be forced from their schools to find places in the state sector, creating added cost for the taxpayer.