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.

Posted because I like facts.

"The proportion of children attending private school is close to zero across the vast majority of the income distribution, and doesn’t rise above 10% of the cohort except among those with the top 5% of incomes. Only half of those in the top 1% send their kids to private school."

"if we focus on those outside the top income decile, a large majority – up to four out of five children – are not receiving grants or bursaries.
Furthermore, among those who received it, average financial support was around £4,900 in 2011-2018."

blogs.ucl.ac.uk/ioe/2021/02/08/housing-wealth-not-bursaries-explains-much-of-private-school-participation-for-those-without-high-income/

What's considered a disposable income?

Income after tax.

There are various qualifications to that, I think it is based on income tax and wealthy people are very good at finding loopholes.

But basically, for employed people, it is 'take home pay'. The money you allocate to housing, food, clothing, entertainment etc

Thanks. As I quoted.

And I question the claim that single parents and retired people drag this figure down. For example my parents, who had above this income on retirement AND had paid off their mortgage. Or my friend who is a single parent, a solicitor, who earns above this.

On the other hand, another friend is on benefits because her husband is disabled, and gets considerably less.

Yes, if your bubble consists of traditionally professional, two parent families, then £60,000 probably seems quite normal. It's your normal. Not the normal of the majority of the population

Those figures are not absolute they are equivalised and the occupants characteristics taken into account. They are not absolute values, they’re used for comparison so not the right ones to use really.

disposable income takes off:
income tax and National Insurance contributions
domestic rates and council tax
contributions to occupational pension schemes
all maintenance payments
student loan repayments
parental contributions to students living away
ground rent and service charges

so thousands off most people’s actual income

@Runnerbeansflower see above you’re not quoting correct information so maybe don’t be condescending

£60,000 is more than the average income. I agree that it is not massively above, not super-rich. But a couple with two children would struggle to send them to private school for all their schooling, or even just secondary schooling, unless they had grandparents chipping in money or inheritance they were relying on.

More or Less on Radio 4 tonight talked about how retired people do have a lower income on average, but it is not that much lower. From memory, it was something like £509 per week versus £549, including all pensions and benefits.
So it does not have as much impact on the overall figure as you might think.
In terms of those elderly people though, it will include benefits like attendance allowance that pays for carers. So not all money to enjoy yourself.

The advice out there about being able to afford private schools often includes the fact that grandparents can gift money for this to reduce their inheritance tax bill.

There are of course children with complex special needs in private school placements paid by the local authority. So not all parents whose children go to a private school are well-off. But most are.

There is no 'correct '

Any 'average ' is arrived at with a number of qualifications. Even at primary school I learnt three different ways of reaching an average (mean, median and mode).

Then it depends which specific situations are included/excluded. So the above figure might only include income subject to income tax, whereas the wealthiest people tend to benefit from income that is not subject to income tax

My point being that the figure I quoted was accurate and can be verified, along with the information about how it was arrived at. Given a previous poster attacked the figure.

Mean and median income is all income from all sources.

Disposable income is all income minus direct taxes, such as Income Tax, National Insurance and Council Tax, have been accounted for.

www.ons.gov.uk/peoplepopulationandcommunity/personalandhouseholdfinances/incomeandwealth/bulletins/householddisposableincomeandinequality/financialyearending2021

So the above poster is incorrect. So most it is your take-home pay, plus benefits or pensions, minus council tax.

And also my point - whichever figure you use for an average household income, £60,000 is very well off and not 'normal '

Although of course it could be 'normal' (or even low income) for your social group.

But looking at it from the perspective of the whole population

You see I wouldn't consider that "disposable". You need to buy necessities, it's a choice where you live but you do have to live somewhere. Disposable to me suggests something you can choose what to spend on.

Take home pay + any benefits/ other income after is just total income after tax to me.

For most of us this is near enough what it means in practice for our situation.

There will always be people who want to undermine your argument by fastening on to irrelevant details

For most it is take-home pay minus council tax.

Ok here are some facts to cut though the usual uninformed ranting. Private schools contribute almost £14bn to the UK economy, support over 300k jobs and generate over £4bn in tax revenue. Not only that but about £3.5bn is saved for the state by school places not being taken by students who go to private schools.

Education is one of the biggest exports for this country’s economy - pre university education alone generating roughly £19bn.

Sometimes, it helps to step outside your narrow, uninformed tunnel vision and look at the bigger picture rather than quoting the first soundbite that you hear on social media.

@sst1234 Do you always insult everyone you talk to?
I am sure everyone knows private schools create jobs and pay suppliers. Is any industry that generates wealth automatically good?

? What's that got to do with whether they get tax breaks?

@sst1234 those aren't reasons for charitable status though are they? Otherwise Sainsbury's or Kelly's Ice Cream would get the same tax breaks. Rather your argument supports abolition of that charitable status.

Sainbury’s doesn’t provide a service that directly saves £3.5bn for the taxpayer. In fact Sainsbury’s costs the public purse by paying low wages that have to subsidized by the taxpayer by tax credits or UC.

But literally tens of thousands of businesses don't benefit from the same tax status. And can you tell me that every member of school ancillary or domestic staff doesn't draw on UC?

@ThinkAboutItTomorrow

Would raise £522,000 for state schools. Not much but something.

Not "something" at all - it would cost more than that to change the law and administration.

But you are quoting businesses that make a profit for their owners/shareholders. Independant schools that have charitable status do not.

@user1497207191 it's every year. So that's £5bn in 10 years.

Or if we added 20% tax it'd raise £1bn a year, even if 20% of people went into the state system. So that's £5bn in 5 years.

That'd make quite an improvement in state schools.

For all those who argue the government wouldn't use it for schools, I know this government wouldn't ever do this so I'm assuming it would be brought in by a progressive government committed to state education as a solution to the UK productivity crisis.

So private education is an industry like any other. Providing a service like any other, one that's exported like any other.

Why not tax it like any other?

That's exactly the point.

Those who attend private school earn 35% more than state school leavers by the time they're 25.

That's what most parents are buying. I know there are a minority of lower income or SEN kids at private school but they are exceptions. The average private school fees are £15k a year and we all know and see the benefits that buys. It should be taxed.