Private Schools being able to hold charitable status

[IdiotCreatures]

I went and looked at a building associated with a local independent school yesterday, as it's always piqued my curiosity.
The school is run by the Woodard Corporation. I looked at their books on company house yesterday.
The amount of money moving through them is ridiculous. If people want to pay for a private education, then surely the institutions should be taxed.
Apart from a small number of scholarships, the average person is not benefiting from these institutions.
In the case of Eton, as pointed out on another thread, these schools are probably leading to damage to society and definitely do not promote the idea of equality.

You do realise that the parents also pay tax just like everyone but do not take up the school places in the state sector right?

That’s irrelevant. Other businesses pay taxes! Independent school is hardly charity work!! They are a money making business

My DC are at a Private school that doesn’t have charitable status and I agree OP.
Private schools are businesses

I couldn't agree more, OP.

The average person is benefiting. The tax payer does not have to pay for children in private school. Some private schools do make a lot of money, but the majority are not businesses making money, the fees are used for education. Why should schools that are not profit making be taxed like a business?

No they shouldn't be taxed. They are providing an education to kids whether you agree with the system or not. Our local comp is as good as the local private school in terms of results, however houses in the catchment are almost double the price of just outside.

Seen as parents are paying tax to fund their kids education if we start taxing school fees, the parents should be able to claim back the tax like childcare

Maybe it should be the other way round parent who go private should get some tax breaks on the fees (bit like the scheme for nursery fees) since they are saving the state money educating their kids.

Did you check out their expenditure too?

Its not Irrelevant! Amend the tax code for parents who privately educate their children and then you can tax schools

Most of the most expensive private schools are charities. The one local to us does some outreach to local primary schools by providing after school clubs for things like chess. Other than that there’s very little they do that I’d consider charitable

Well by the laws which define what constitutes charity work, some of them are

I don’t particularly think religion is charity work, but most churches and places of worship have charitable status

In your opinion, what would be 'enough' charity work? Where do you shit on churches being charities too?

Perhaps people without children should also get these tax breaks, since they are also saving the state money that would have been spent educating their kids?

Morally you’re probably correct but the logical outcome is that state school numbers increase by 8% overnight, which benefits nobody given the already parlous state of many state schools.

also many independents (eg for SEN) are actually run by Trusts and provide education for children who cannot survive in the state system because of disabilities such as autism. Do you want to put them out of business or just the ones that benefit rich kids?

The parents who send their children there are paying for a state school place too, and not using it, which does benefit the state schools and every pupil in them.

Promoting equality may be what you feel is a public good, but that’s very much a value judgement. I support equality of opportunity for example, but not equality of outcome.

At least no one is suggesting that they are taxed twice. Because taxes on independent education will only be passed on to parents.

Also I actually think tax breaks for people without children sounds fair tbh

I can't say this bothers me that much, there are far more pressing issues in relation to education/schools in this country. The local independent allows children from our state school to attend after school clubs (free of charge), does outreach activities for the local community that anyone can attend, and during covid offered a lot. I'm not arsed if they have charitable status or not really.

As well as parents effectively being taxed twice if that's the case (once from their taxes that goes towards a state school and the second time through increase in fees if private schools were taxed), private schools often do educate a minority for free. Most if not all have scholarships and often "hardship funds" or similar to support enrolled children whose parents are suddenly and unepxectedly unable to continue paying fees. So i think that's partly why they are "charitable".

If they were a money making business, they wouldn't be a charity, and they'd have to pay tax.

"Money making" means that some of the money taken in goes as profit to the owner/s. A charity spends all money it takes in on its charitable purposes.

Well education is VAT exempt, so it wouldn't be the parents being taxed if private schools lost their charity status- it would be the school being taxed on profits. So the more money they put back into education, including bursaries, local outreach etc, the less tax they would pay.

I totally agree that most private schools don't do enough to justify their charitable status. I don't see that a few bursaries are enough either- they should have to show how they benefit the wider community.

I don't understand how this is a point?

I pay tax like everyone else, but also do not take up a school place in the state sector. I do not send my children to private school either. I have no children.

Surely those claiming that parents who pay for private education, should get a change in tax code, as they are saving the taxpayers money, by not taking up a state school place - the same goes for all child-free adults too, right?

Amending parents tax code would be very complicated to set up (and I'd imagine there would be an uproar from many childfree people - you're talking 18 years, not just the 3-5 years a child goes to nursery).
The easiest solution would be to just tax the private schools, as any other business. However, any money that goes directly back into the school to spend on the students' education (staffing costs, supplies, and all the other stuff), does not get taxed, as it is an expenditure. It's the profit that should get taxed, and many private schools are making a profit.

If you added tax to the school fees at DC's school, something like 75% of people couldn't afford it and would pull their DC out. That would lead to the school closing and our local borough having to magic up 1,800 places at the local state schools overnight.

Honestly, a lot of private schools would not survive without charitable status. There isn't really that much money running through them - certainly not the one I went to. My class was a hodgepodge of farmers kids, kids from the local villages and estates, and the international pupils who actually paid enough to keep the place running.

If you want your kids to attend school in poorly maintained buildings, with outdated facilities, send them to private school! 😁

So the more money they put back into education, including bursaries, local outreach etc, the less tax they would pay.

If they are charities they can't do anything else with the money, it will eventually be spent on those kinds of things anyway. The difference that charitable status presumably makes is that they don't have to spend all their money by the end of each tax year to avoid being taxed, they can save up for a new roof, etc.

Having said that, I think I read somewhere that the effect of being charged corporation tax would be negligible, as there would be hardly any profit. The big problem with losing charitable status would be having to charge VAT on fees. That would put up private school fees 20%, with all the extra money going straight to central government.

Opting out of tax because you don't use the facility is always a fatuous argument. You'd get people who don't have kids/privately educate their kids wanting one tax code, then you'd get people who don't use the NHS wanting another tax code (until the point they discover they can't have what they want on their health insurance or are rushed from a private hospital to an NHS one to save their lives as happened to a friend's mother - so they would need yet another tax code to pay for what they have on the NHS) and then there are the people who don't want to pay for defence - they'd need another tax code. What about the people who have never needed the fire brigade? Should they get money back each year?

This is why tax is universal - it's just not workable otherwise.