VAT on school fees not applied retroactively- ultra wealthy are safe

it is the super rich i have seen

I know it makes me scratch my head when private school parents complain the VAT will make private school only for the rich!!

I always said that the VAT on fees won't affect the really rich and may well make Private schooling even more elite.
Oh well, what can you do? Pay it or find a State alternative

VAT won't be reclaimable anyway as it's not a valid business expense!

We literally just found out about the VAT increase being implemented from January

i don’t mean to be thick but surely we’ve pretty much known for well over a term, for many months in fact, that this was very very likely to come in?

So they’ll be back in September? but maybe just for the term? in which case you’ll have to give notice on day 1 of new school year

Primary school age.

As I said I’m not keen to move them mid year although I’m also really not keen to pay an extra 20% starting January.

starting to look at options in local state schools and I guess the time of move will depend on what we’re able to sort there.

Stand by private equity swooping in to save failing schools. With no benefits tied to being a charity, there is no incentive to remain charitable and corporations will take over. They are already eying up the sector. The choice will be state dictated or investor dictated. Except for the very rich at very privileged internationally renowned schools who will retain their charitable status and cream off the elite. Free thinking will be a thing of the past unless you were born rich. It's such a poorly thought through policy - being used as a proxy to pass moral judgement - and it will have awful long term ramifications and won't even raise the money stated. But hey, it allows some people to get their kicks feeling righteous, including many MP, so why let sense override ideology?

It doesn't affect me, I just know wealthy family are planning to do this. Either way the ultra wealthy won't be hit by the 20% increase.

It is going to be a lot more expensive to do it that way. It will be reported as a benefit in kind so you will have to pay income tax on it at your top marginal rate and I believe the company will also have to pay NI contributions.

So many posters rubbing their hands together with glee about the changes but they seem to be missing that this policy will only make private schools better. Schools will be able to reclaim VAT on projects completed in previous years and will now escalate any future plans to develop their schools further to offset the VAT against fees. Many schools will not pass VAT onto parents for some time given that they will be able to reclaim such large amounts. They'll also do all the other things mentioned such as cease bursaries and their support of the state sector forcing local councils to find additional funds to supplement otherwise their policy is going to have a very negative effect on the state system. That or the children don't learn to swim or play sports etc.

A lot of posters also seem to think that parents choose private school solely based on their child's future network opportunities, which is total nonsense and just demonstrates their ignorance. The same posters also seem to believe that extra curricular activities aren't important to a child's education or their predicted success in life. How terribly naive.

My DC go to private school and will continue to do so. I agree that the wealthiest people in society should be taxed the most to fund the society we live in. So increase income tax and catch everyone fairly - including the wealthy who choose not to pay for their children's education because they'd rather spend their money elsewhere.

OP, it has long been the case that you set up an offshore account / company, you can bring so much into the UK per child tax free each year. People have always done this kind of thing and paid school fees from offshore. Or paid them upfront to avoid yearly increases.

Most schools will be able to offset a lot if this VAT - eg. building works / development etc. Fees go up every year anyway.

No school is going to lose a large percentage of its students to this policy - they will find ways to absorb or mitigate fee increases.

It isn't tone deaf at all because that comment was replying to a comment which said that for most private school parents school fees are a drop in the ocean. The comment was making the point that it very much isn't a drop in the ocean. Its a massive financial commitment

Ours offered whatever amount of years in advance or just deposit in a lump sum from which they would subtract fees but they were very very clear that paying up front has nothing to do with the applicability or not of also being required to pay VAT on the fees.

My child's school was offering 10yrs fees in advance, and I'm pretty sure many will have taken it.

Not a good idea at schools that might go bust, or for people who can make good investment returns elsewhere, but otherwise it's a good deal, even modelling a fair chance it won't end up avoiding VAT.

If the government doesn't feel under pressure to fund state schools properly when they include 94% of the kids in the country, why would they suddenly feel the need if it includes 95-96% of the kids in the country??

What is Labour doing to actually make state schools better - half an extra teacher per school won't do anything. What are they doing to fix the postcode lottery with school and ability for state school parents to buy into a better school if they can afford an expensive house?

I can’t believe people are still going on about Diane Abbott. That issue is old and doesn’t have anything to do with the current cabinet members.

Strange people would overlook Abbott but not be concerned about black children today whose schooling would be impacted by the extra VAT

People really do have blinkers on with Labour politicians and really want some dc to feel the impact of a sudden cost

No thought given to the extra stress for some due to Jan date

Not surprising given the policy at all but still

Reading the news today, surely they are not going to wait until the actual budget (Oct 30) to give all the details on this if they want to implement it for Jan 2025?
How are local authorities and state schools going to cope with the influx of in year transfer requests, since they would have expected it for Sept 2025 too? Was Jan picked because the government know not many parents will want to take out their kids in year unless they have to? So the stats won’t really be real story for another few years?
Much more sensible to have left the new tax liability starting at Sept 2025 IMHO

Still a very racist society....still

Diane Abbott's son left school many years ago. As a black woman in what was still a very racist society, I think she did what she believed was best for her child within an imperfect system. I am not going to judge her for that.

Starmer's kids are in state as far as I know.

No idea what you’re talking about. This is what Rachel Reeves has said
https://www.bbc.co.uk/news/live/c3g9yy73l77t

Labour is not talking about stripping money away from the most vulnerable people in society. They have said that their mid term plan is to remove the two child benefit cap. Which is a good idea since so many children are in poverty right now in a developed country.

The money has to come from somewhere. It’s much fairer that it comes from people who can afford it. Vulnerable people are the ones who’ve been shat on for years. And if they raise taxes then good. In this country we expect Scandinavian public service levels on as little tax as possible.

Retroactive? Like how far back do you want to go? Would you then think any tax increases in anything should be backdated? How unfair would that be? There's an EU directive against taxing education (which we are still tied to, so not sure how they will get around that).
Also was this just on the budget yesterday? How many people would have the foresight to pay years of fees up front before now? They may have intended to, but I doubt many did immediately it looked as if the VAT was going to be imposed (and in my kids old school, can't think of anyone who could have afforded to pay more than, at a real push, a year in advance). Most thought it wouldn't until September 2025.

Diane Abbott, Keir Starmer, etc etc