To ask if anyone is clued up on the challenge this week to VAT on school fees?

They aren’t charities, despite some of them being ‘charities’ to avoid taxes … so shareholders? No. But businesses , absolutely.
The likes of Brighton College aren’t expanding their brand into Singapore, Abu Dhabi, Vietnam etc because they really care about the education of Asian and Saudi kids…
it’s all about the money, baby. Having it, making it, protecting it, growing it.

“And life - and society - are mirrors. For every worried parent here, there will be a worried non-parent. Worried about their tax rises. Their benefit cuts. Their loss of services. Their waiting times.”

@SerendipityJane - you are missing the fact that this VAT on private schools is not going to make the tax payer money. Therefore, it is not really a tax and it is not proportionate. It is simple class discrimination and ableism.
The only defence Labour has is that it is a simple tax raising method - well it is not, kids are leaving and not joining private schools and the state has to fund their education.
So there won’t be more services etc.

Taxation is always a balance between raising funds for all and stifling growth. On all accounts now Labour have gotten things very very wrong. The current recruitment figures show that current graduates are graduating into one of the worst cycles ever and the NI has stifled business. They were handed a growing economy by Sunak (for all his other faults) and they have killed it.
Now all we can hope for is that the post Covid international wars come to an end so that they can somehow jump on that growth.

It's not for you to say who can and cannot post.

This is a public forum. Moreover it's in AIBU which is the paradigm of robust discussion.

And life - and society - are mirrors. For every worried parent here, there will be a worried non-parent. Worried about their tax rises. Their benefit cuts. Their loss of services. Their waiting times.

Remember: we're all in this together.

“Nursery classes provided by private schools
Nursery classes that are wholly, or almost wholly, made up of children below compulsory school age remain exempt from VAT. For example, where 90% of the children in the class are below compulsory school age the class will be exempt from VAT.”

Here you go, more age discrimination.
A small prep with a mixed nursery and Reception class, many kids below 5 - what a mess!

https://www.gov.uk/guidance/charging-and-reclaiming-vat-on-goods-and-services-related-to-private-school-fees

“Activities of charities that run private schools
If a charity carries out a number of activities — including running a school — each activity must be considered separately to decide if it is a business activity and subject to VAT.
An activity is a business activity if it involves making supplies for a consideration with a view to generating income and will be chargeable to VAT. It is not necessary for the activity to make a profit.”

So renting out the local pool at cost will now attract VAT? For all of us using private schools for extracurricular activities. I hope Bridget Phillipson gets charged a penalty for playing hockey at the local private schools! 400% VAT just for her. It is not discrimination…

Absolutely idiotic policy.

I did say "how many" as a question. "?". Suggesting I didn't believe it to be 100%, yet also not believing it to be zero.

Because I dare anyone here to tell me every single private school in the UK exists merely to educate and not to return a profit to it's investors. I double dare you.

Odfod
You are being deliberately goady

Any half self respecting business owner I know would use the imposition of 20% VAT on their net prices as an excuse to increase the net price by ... say 25% ? (Conservative I know). Bearing in mind the extra resources needed to manage the accounting now.

In fact now I come to think of it, 30% is probably more realistic.

Lots from the sounds of it. And they seem to be hammering their customers too… passing on full VAT and hiking up fees despite the fact that they’ll be able to claim the tax that they have paid previously on capital projects like buildings and land acquisition once registered for VAT.

Private parents are being taken for mugs.

They can't! If they invoice an amount for VAT then they have to pass that on to HMRC.

I idly wonder how many private businesses schools are using the imposition of VAT as a cover to sneak a little extra % on top ?

https://www.scotsman.com/education/edinburgh-state-secondaries-inundated-with-applications-ahead-of-vat-private-school-fee-charge-4899477

Dfriend decided not to send 2nd child to private school last year because her school has put up the fees by so much year on year in the 6 year gap that her fees had almost DOUBLED.
From what I read/ hear this ain’t that unusual 5-10% annual increases. Parent being priced out of ‘choice’ really has little to do with Labour.
Still, the school has a ‘ world-class’ cricket pitch now, costing millions. So not all bad for the kid who still has a year left there, and no interest whatsoever in cricket.

‘I’m confused. Private schools are ‘independent’ - they decide if they close or not.’

I thought that might happen, that’s why I suggested you having some time to think about it. You’ll get there.

‘Some state schools are closing, as the child
population is dropping and less places are needed - for now anyway.
Mainly catchments are being re-drawn…’

Makes sense, thanks for letting me know.

‘Labour are closing schools, what other aim could there be for the policy than pushing children to the state sector?’

I’m confused. Private schools are ‘independent’ - they decide if they close or not. Unless they’re so awful the state has to step in.

Some state schools are closing, as the child
population is dropping and less places are needed - for now anyway.
Mainly catchments are being re-drawn…

“Well that’s bullshit. Because I had to pick a school in a catchment. I couldn’t just decide that I wanted another school 10 miles away.
So the state absolutely interferes.”

@Lookslikemeemaw - the equivalent in the state sector would be if suddenly every family would have to cough up 20 per cent of state funding for their state school or lose their school place (except children with EHCPs).
Would do you think would happen if they did that?
The state cannot interfere in state school places in that way, they should not be able to do it with private schools either.
They have exempted nursery places and university places from the VAT, state boarding, children with EHCPs etc and obviously all children in state schools too. There is not going to be VAT on any of those children. Just the 550k odd kids in independent schools. It is a breach of the act, whatever way you end up looking at it.

It’s not a valid comparison at all. The U.K. Government isn’t a signatory to an agreement specifically stating to not interfere with people’s choice of tin opener.

Labour are closing schools, what other aim could there be for the policy than pushing children to the state sector?. There’s already been 3 citing it as a reason for closing. You seem to be half way there with understanding this when you say, ‘if you can’t afford the service don’t use it.’ What happens to the school when people don’t use it? Don’t answer right away, have a little think.

You are correct that most PS aren’t commercially viable as by definition they are not commercial entities.

There was a labour spokesperson on the Politics Show this morning absolutely insisting it wasn't an issue because children with SEN will be exempt due to their EHCPs. I was yelling at the TV that so many don't have them because the process can be so tortured and slow that desperate parents have hoicked them and private to get them the needed support within a week. If that is their defence of this it will get shot down.

Generally under UK law, aids and adaptations for the disabled are VAT free.

However VAT is still applied on items that may be essential to a disabled person but discretionary to you or I. For example an electric can opener.

And it's been that way for a looooooooong time (I can assure you all).

It's not a perfect comparison, but it does show that the state can and will interfere even if it actively disadvantages a protected minority group.

I'm also reminded of VAT on sanitary products.