With the start of the school year upon us, the inevitable dash to buy school uniforms is on plenty of parents’/carers’ agendas. Over the last few years, there have been major class to scrap VAT on children’s school uniform.
Value Added Tax (VAT) is a consumption tax levied on goods and services across the United Kingdom. Most products are subject to VAT, however VAT on school uniform has raised questions among parents, schools, and the public. Our expert VAT department enables business owners to focus entirely on their business without having to worry about the small stuff. Nordens’ adeptness and efficiency in filing and submitting VAT returns is second to none. Our team will also help you in determining which payment method is most suited to your company’s structure (limited or unlimited charges). They will also cover which VAT period is best suited to your company’s needs.
For now though, we delve into why VAT is applied to school uniform, outline the current rules and exceptions, and discuss the possibility of VAT on school uniform being scrapped in the future.
Why Is VAT Applied To School Uniform?
VAT is designed to generate revenue for the government and is typically applied to most goods and services. School uniforms, despite their essential nature, are generally considered a form of clothing. This means they are therefore subject to VAT like other apparel. The rationale behind this decision is that school uniforms are not considered “essential items”. Essential items are considered basic necessities, such as food and medical supplies.
As of the last update in September 2021, the standard VAT rate in the UK is 20%. Invariably, this rate was typically applied to school uniform. However, there were some exceptions and variations that should be noted:
Size & Age
Children’s clothing, including school uniform, is generally exempt from VAT. This exemption applies as long as the garment is intended for children. This is detailed as clothing available in a range of sizes suitable for those under the age of 14.
While most school uniforms are subject to standard VAT rates, sports attire specifically designed for educational institutions might be subject to a reduced VAT rate if certain conditions are met. Most services pertaining to sport and exercises for eligible bodies are zero-rated.
Some uniforms used for specific vocational courses. This includes clothing worn in healthcare or protective services training, could also be zero-rated for VAT.
Possible Future Changes
The question of whether VAT on school uniform could be eliminated in the future is a complex one. Scrapping VAT on school uniform would likely require a change in government policy and could have broader economic implications. Some arguments in favour of such a change include:
Eliminating VAT on school uniform could provide financial relief for families, especially those with multiple school-going children. This could help alleviate the burden of back-to-school expenses.
Equality & Accessibility
Making school uniforms more affordable could contribute to greater equality among students. This ensures that all children have access to the same educational opportunities regardless of their family’s financial situation.
Education Sector Support
Reducing the financial strain on families could indirectly support the education sector. This enables children to have the necessary uniform and resources to fully participate in school activities.
However, despite the overwhelming evidence in favour of scrapping the VAT on school uniforms, the government have remained stern on changing the rules and exceptions. An online petition was to make VAT on school uniforms fully exempt, was officially responded to by government in August 2023. The response from the HM Treasury stated, “School uniform designed for children under 14 is VAT-free. This is when body dimensions begin to merge with the adult population.
There are no plans to go further but we keep all taxes under review. The Government believes that school uniforms should be affordable for parents. That is why, in November 2021, the Department for Education published statutory guidance on the cost of school uniforms, to which schools must have regard when designing and implementing their uniform policies. The guidance requires schools to ensure that their uniform is affordable and secures best value for money for parents, requiring schools among other things to keep branded items to a minimum (to allow parents choice on where to purchase items), make second-hand uniforms available for parents to acquire, and engage with parents and pupils on cost issues when developing uniform policy.
There would be no guarantees that through the extension of any relief, the benefits would be passed on by retailers to parents buying uniforms for their children. The Government believes that the action already taken to ensure the affordability of school uniforms, alongside the wider financial support, are the best ways to support families deal with these cost-of-living pressures. We keep all taxes under review, but we have no plans to make changes to the VAT treatment of school uniforms.”
The presence of VAT on school uniform reflects the broader complexities of taxation policies and government revenue generation. There are valid reasons to consider exempting school uniform from VAT, however such changes require careful consideration and potential trade-offs.
As of now, understanding the current rules and exceptions related to VAT on school uniform is crucial for parents, schools, and policymakers alike. As we move forward, it remains unlikely that the UK government will make any changes to its approach regarding VAT on school uniform.
We hope this outlined to you the rules, exceptions and potential for changes surrounding VAT on school uniform. If you’d like to know any further information, or anything accounting related, please do not hesitate to get in contact with us at Nordens, where one of our trusted advisors would be happy to talk you through your query.