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.

To obtain charitable status a private school needs to meet minimum requirements and this often involves community work, scholarships etc. I think it is worth looking at how high this bar is set, i.e. should there be more scholarships etc, but I would not remove charitable status. This would cause serious problems for many institutions which relieve pressure on state resources.

You need to be clear about what tax you mean.

Corporation tax is only paid on profits. Most independent schools which are currently charitable would make very little profit if the charities exemption were removed because they have huge expenditure and would plough profits back into education. They would therefore pay very little corporation tax. This isn’t a loophole - it’s just how the system works. Nurseries are similar in that they do pay corporation tax but not very much usually as they are a low profit business.

VAT is a separate issue and would involve removing or amending the VAT exemption for education. It doesn’t have much to do with their charitable status. You then have issues such as whether the exemption should also be removed for tutoring, music lessons, universities or schools for children with special needs. Making independent schools charge VAT would allow them to claim back any VAT they pay on services etc which they can’t do at present. So while removing the exemption would result in a net VAT benefit to the treasury it probably wouldn’t be by 20%.

You do realise the people with kids in private schools are paying taxes which go to fund government schools but because their children are not taking up government school places this saves the general public millions?

I would even go there.
Those with children of school age benefit because the private school kids parents are paying their taxes and paying again for private education. A lot

Oops. Was going to add that a lot of the special colleges for SEN older students are charities too. That stuff is very expensive to provide and places like that and their students would suffer greatly if this was bought in.

I wonder how childless people feel about paying their local and national taxes towards education?
I think you need to drop this

I think it's less about corporation tax or VAT. I think they should pay rates as a business though.

It would only add ~£850 to the annual fees bill (if you can afford private school an extra £20 a week is peanuts).

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

Take it up with the government- Nigel Huddleston. Lots of vested interests. Good luck.

I certainly think that private schools should have to do a lot more to demonstrate the public benefit of their charity.

Of course, they should not be charities, it is a total con.

The fact that means people do not use state services is irrelevant. Does that mean all private dentist surgeries should be charities?

The state provides services. You choose to use them or not. If you do not use them, that does not allow the business to then claim it is a charity.

It is one rule for the rich and a different rule for everyone else.

Our school have just built and paid for a national hockey facility, that is used by other local state schools and clubs for free. The school always holds tournaments, science events and sports events throughout the year and allows two of the local primary schools to use their playing fields for athletics during the summer months. It is a hugely charitable school.

It may look like they are making huge amounts of money, but outgoings are large. Teaching salaries, national insurance and pensions make up a huge percentage, as well as heating, generally older buildings. Our school offer hardship funds to support children to finish either their GCSE's or A Levels, if their parents lose their jobs, as well as 10 bursary places a year per class.

If they put fees up by 20% many families wouldn't be able to afford to send their children to private school (us included), but what we can afford are houses in areas with outstanding schools, which would push prices up for others. We would take places in outstanding schools, meaning other children wouldn't have the spaces they need.

If people couldn't afford private schooling, more money would go into state education. The two tier education system in this country is a disgrace.

My experience is private schools are far keener on offering up the use of facilities to local state schools to justify their charitable status, than state schools are in using the,.
Because often these facilities are not that useful to state schools. They still have to transport kids there. So in the example above transport kids to a private school to do a hockey game. Even if they can walk there, it means a higher staff ratio than simply using their own basic pitch within the school. The benefits to state schools are usually incredibly slim to non-existent. It is simply about making private school fees cheaper.

How? What mechanism would make that happen?

Even assuming it did, would it offset the huge number of additional pupils that it would have to cover?

The double tax thing is a red herring. Everyone pays taxes that cover the current generation of schoolchildren, regardless of whether they have zero kids or three in state schools or seven in private schools.

Private schools should not have charitable status because they entrench the class system and are therefore a social ill. If the well-heeled had to send their kids to the local comp, you can be damn sure that standards at the local comp would improve. Instead they give their kids a leg-up to make sure they do better than other kids who may have more inherent potential.

I think Labour looked at ending charitable status and wimped out, went for increasing the obligation on schools to demonstrate broader benefit by opening up facilities to the community. Hence the token efforts to invite people in, to tick that box.

Independent school parent here. A few points:

• Independent schools might look like they have ridiculous amounts of money "going through them" as you put it. But so does the Red Cross and Oxfam. Millions in income... and millions in expenditure. In the same way, most independent schools are not for profit. They are not paying out profits as dividends to shareholders but are ploughing everything back into education. Without charitable status they would not be able to stay open.


• Most do make their facilities and services available to the local community, be it through running sports camps, community sports clubs, outreach, and yes, scholarships.


• Kids in private education are not drawing on state resources, so in effect parents are paying twice for their education. Where we live up to 25% of secondary school pupils attend independent schools. It would be chaos all those kids needed a state school place.


• Many independent school parents, like ourselves, are not ultra rich, just ordinary folk on average professional salaries. But for our own reasons we have prioritised paying for education over, say, living in a large home or driving the latest car. It's about having a choice.

@SafferUpNorth You ordinary folks would still have the choice to pay for private schools without the state subsidy of charitable status. And it is a state subsidy.

Anyway so many well-off people like telling other parents that the only reason their kids go to private school is that they prioritise what they spend their money on. Surely if charitable status was withdrawn you would simply reprioritise what you spend your money on?

If charitable status were to be removed, fees would go up and that would mean many families would no longer be able to afford it.

This would then increase pressure on an already overstretched state system and they would not be able to cope with the new intake of kids.

This would then make the likes of Eton etc even more elitist and full of wealthy international students; thus contributing to the money making private education system.

So absolutely should private schools hold charitable status.

Its incorrect to say that parents who send their kids to fee paying schools to make sure they do better than other kids. I send my kids to get the most out of them. Would it be better if I spent it on holidays and fancy trainers for them?

@Dogtooth This statement is so narrow-minded and classist in itself: Private schools should not have charitable status because they entrench the class system and are therefore a social ill.

Apart from places like Eton, most independent schools are not just populated with kids from the British 'upper classes' but have children from a wide variety of backgrounds, very often with foreign heritage, and class is pretty much irrelevant. My DC's school has a far greater cultural diversity than the local comp.

I think a 15% tax on private school fees is reasonable.

It would raise an extra billion for the state sector and be ~£40 a week for parents. If you are paying private school fees this should be doable.

At least that way those on bursaries or scholarships wouldn't suffer and the really high fee paying places would pay more.

@Dogtooth

We wouldn't send our kids to the local school if private schools closed.

We would pay for a tutor, perhaps even our existing teacher, and perhaps we'd be joined by a few local friends who used to go to the same school. We have space for these lessons or we'd hire the village hall which is empty in the day. And we'd pay for sports tuition, art and music. I'd imagine these local friends would also join in our lessons.

You'd find that many parents would do exactly the same.

Not private school, simply home educating in small groups.

I went to a local comp. It was hideous, hence very firmly my children would not go to one were there any other or pom.

Some private schools are special schools that take the children that there is no maintained school for.

Why should it be the job of schools to 'promote equality'?
Society isn't equal, in any way.

Parents who pay for private education still have to pay tax, part of which pays for state schools. Why shouldn't they be offered a tax rebate to compensate?

@ThinkAboutItTomorrow you say it will raise a billion for the state schools but throughout this thread it has been repeatedly mentioned that the parents who send their DCs to private school contribute to state schools through their taxes? It sounds as if people want to penalise those who have choices by virtue of their wealth/income which is unfair