Why is VAT charged on school uniform?

BBC Reality Check reports that as children across the UK are settling into the new school year, many families are facing hefty bills for compulsory school uniforms. For older children – or those who are taller than average – school uniforms, as well as all other clothing and shoes, attract the full standard VAT rate of 20%.

Clothing and shoes for young children have been charged a zero rate of VAT since the introduction of the tax on 1 April 1973.

The problem is that there is no definition of the term “young children” in VAT law. Instead, the VAT relief is based on the maximum size an average child will be on their 14th birthday. So clothes for older children, as well as many children under the age of 14 who are larger than average, are taxed at 20%. And this includes school uniform.

The policy would be very popular with parents, and it has been considered in the past, but it has never been taken up. Way back in 1980, HM Customs & Excise considered the possibility of scrapping VAT on school uniforms, but concluded that the zero rate, aimed at children, would be exploited by adults in the larger sizes.

Last week, Labour MP Sarah Jones asked Steven Baker, a minister at the Department for Exiting the European Union, whether Brexit might result in a change in policy. 

EU countries have been co-ordinating VAT rates since 1992 to ensure there is no unfair competition across national borders. Under EU rules, countries must apply a minimum standard VAT rate of 15%, but 0% VAT is also allowed for the goods which were taxed at that rate before 1991. So children’s clothing and footwear in the UK are protected.

Exceptions to the rules

If a school is exclusively for pupils under 14 years of age, the zero rate can be applied irrespective of the size of the garment, as long as the garment is unique to that school by design, such as a prominent badge. So, for instance, a uniform for a private prep school which caters for children up to the age of 13 only, attracts 0% VAT irrespective of the size, but the parents of older or taller children in a typical state secondary school with pupils up to the age of 16, have to pay an extra 20% to cover the VAT.

Read more Why is VAT charged on school uniform?

Now you know. Do your think singling out taller/larger/older pupils is correct? Please tell us your thoughts in comments or via Twitter ~ Tamsin

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