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Peter's Blog - Kent Independent Education Advice

I suspect that school teachers, who are employees of schools or Academy Trusts aren’t usually in the business of tax avoidance. As a result the following, relating to one of the highest paid leaders of a Kent Academy Trust in the county, caught my eye.

The leader in question has arranged his contributions to the Teachers’ Pension Scheme to be paid in blocks of five months in the scheme, then withdraw for five months, then renew, the pattern to be replicated indefinitely. I am not privy to the rationale for this, but the tax consultant who advised senior leaders of the trust, at cost to the Trust itself, clearly considers this advantageous.

Whilst he is assured this is legal, as to the moral use of the Teachers’ Pension Scheme in a way it is clearly not intended, I leave it to others to judge.

I also wonder how the teachers in the Trust view his actions. Teachers in state schools in England have been subject to a cap on annual pay increases, initially of 0% and then 1%, which has been in place since 2010. There are no tax reduction arrangements for those on the front line, as the gap between their salaries and those of their leaders gets ever wider year on year, as my previous article shows. This manipulation of tax schemes not available to the classroom teacher,  increases the gap even more.