Paying private school fees through a limited company can be incredibly tax-inefficient – especially if you’re trying to keep your income around £100,000 to avoid the 60% tax trap. In this conversation, Simon sits down with David Abel from Vision Dental Wealth to unpack the real challenges business owners face when funding school fees and other large personal expenses.

They explain why taking dividends to cover school fees can quickly push you into higher tax brackets, often meaning you need to extract significantly more from your company than you actually spend. The discussion also tackles common “school fees planning” strategies, including the widely promoted use of grandparents and trusts. While these approaches can work in very specific circumstances, they highlight why many of these structures no longer stand up to HMRC scrutiny—and how getting it wrong can lead to unexpected tax bills.

Instead, the focus shifts to more practical and compliant planning opportunities. From being more strategic about how and when you extract funds, to using director’s loans and pension contributions as part of a longer-term plan, this video explores ways to reduce the immediate tax burden while still meeting real-life costs like school fees. They also touch on how future events, such as selling your business, can play a role in unwinding these strategies effectively.

Ultimately, it’s about understanding your options and building a plan that works for your specific situation. If you’re a business owner trying to fund school fees without triggering unnecessary tax, this is a must-watch.

Feel free to get in touch if you’d like to talk things through.