Last updated on April 13th, 2015 at 01:57 pm

As small business owners one of the things that you might be considering is sending your children to a private school. If you are, and you run a typical small business, your next thought is probably not “which school do I choose” but “how will I afford the fees that private schools charge.

It’s all very well for schools to charge more than £3,000 a term (the average fee is £11,500 in 2012 according to this report in the Daily Telegraph) and this doesn’t even include the additional fees for extra-curricular activities – music lessons, clubs, trips etc, but to take this out of the business as earnings can do several things :-

1. Impact the cash flow of your business by taking out large chunks of money at what may be the wrong time of the business billing cycle

2. Impact your tax and national insurance payments (taking out a large sum could mean that your PAYE payments to the tax man jump up and down in value)

3. Make your payroll and accounts more difficult than they would otherwise be.

4. Affect any tax planning that may have been suggested to you by your accountant

This is where many private schools can help you and other parents break down the termly fees into more manageable chunks. The way they often do this is by joining up with a scheme such as Premium Credit’s School Fee Plan that offers credit to parents to cover the expected annual cost and allows parents to split this cost (and any associated credit charges) into much more manageable monthly payments. This then lets you to take out smaller, regular payments out of the business and smooths out any cash-flow or PAYE problems and will more than likely get the “nod of approval” from your accountant as it makes your tax planning much easier.

So, maybe the question you need to be asking is not “how will I afford the fees” (although this is obviously still going to be a concern) but “does the school offer a payment plan (either direct by the school or via a company like SFP).

I would be interested to hear from parents that have used such a scheme – I know of people that have sent their children to private schools who had struggled with termly payments and splitting the payments into monthly chunks, albeit with a credit charge added to them, would have made the payment of private school fees much more manageable for them.