it's daft to think parents with kids in private school have money to burn?

[Popgoestheweaselagain]

Just got asked by my school what would be the impact if they had to pay VAT, adding 20% to fees. My response was 'I'd try to keep my child in the school, but ....'. I think almost all parents would respond this way. Alarmed, did a quick google, and found this is Labour policy. Next time they come knocking at my door looking for my vote, I'll be telling them why they can't have it!

Now, I understand why some people are ideologically opposed to private schools, the unfariness etc. But when I hear this argument that goes something like 'Those people must have loads of money because they send their kids to private school' it kind of annoys me. Money is finite. If you've spent all your money on school fees, you obviously don't have it anymore!

I don’t know Jacob Rees Mogg’s personal tax affairs but if he is resident in the uK (which he is as I understand) he needs to pay tax on his global income including any income paid to him from offshore companies. So in general I would say from what little I know of his affairs he is fairly taxed yes.

I think that there’s a lack of understanding how tax works from many in the uK. Offshore companies themselves (assuming they are not active in the uK) don’t pay tax but any payments to uK residents will be taxable in the uK in the same way as payments from a uK company would be.

Educational inequality is the single most divisive thing in our society. Private education is a luxury that provides its users with a fast track to privileges and chances not available to the majority.

Sod the VAT it should be banned.

I completely agree with you.

What I don't understand is the assumption that if the business (the private school) has to pay taxation, why that full 20% increase would automatically be passed along to the fee-paying customers. It's not as if the private schools operate on a shoestring, is it? They might have to increase fees only in line with what their customers could actually afford (famous market forces at work, I thought Tory types loved this shit) and accept a hit to their profits, or maybe reduce their outgoings, for example pay their teachers more in line with the state school salaries so they wouldn't automatically cream off all the best teachers from the state system. The fact the OP's private school immediately posits this potential tax as 'your problem mate' to it's customers gives you an indication of how much the school behaves as a 'community' or a 'charity'. It's a profit making business.

All the people who want to see the end of private schools should be careful what they wish for:

-higher taxes to fund the places
-richer families spending the money they save on tutors and other enrichment and continuing to consolidate advantage without the high costs to themselves
-well supported children flooding into the state system and grabbing a lot of the goodies in school (places in top sets, winning the prizes, getting the highest marks, the prefects, the heads, winning the essay contest, math Olympiad etc. Not saying they will get them all, but they will grab a generous portion.)
-no more corralling of “rich kids” into the private school quota for top university places; they are blending in with other state school kids not on free school meals.

It will definitely change the social dynamics in schools.

On one hand people who send their kids to private schools save the Government 6k per child per year, totalling billions. I would have sent my kids to private school given the chance because I was aware that the connections would be valuable as well as a better education. And this is due to the benefits for my DC which everyone wants?

But I just can't get over the inequality, and it drives me nuts because I understand how it happens! I don't think parents should be penalised for giving their kids the best chance they can but if that 20% VAT could be ploughed into education to improve state education, then I think I could get over my misgivings? Although it shouldn't be the parents of private school students' responsibility, should it? To make sure state schools are adequately funded? hat is everyone's responsibility?

My local school is struggling with the basics and even heating is now a massive burden...

Oh it's hard isn't it!

Overall, on thinking about it, I think that I am closer to saying that no, VAT shouldn't be added to private school fees. But I am not a decision maker!

Hand on heart I can assure you I wouldn't send mine to private school even if we had enough money to live off 5 times over.

I don't like the culture. The ethos or the types of people it tends to develop. I want more for my kids, more awareness, humility and "real" life. That's a choice.

Blimey, a lot of misunderstanding of the UK VAT rules here.

A non-charitable business that provides education/training = VATable unless the source of funds is from specific state coffers (in which case, it is exempt). So commercial training providers may provide both.

Businesses with charitable status (inc private schools) = exempt where provision meets charitable aims, regardless of who is paying. Labour is aiming to remove the charitable status, and/or change the legislative provisions.

Most state schools are non-business, income from which is outside scope of VAT (doesn’t depend on charitable status).

Putting VAT on fees also means increased VAT recovery on related costs - so a decrease in net fees should be available. State schools (inc academies) get VAT recovery on costs under separate, specifically legislated regime.

I agree @robertpaulson . I don’t understand why people single private schools out as unfair, when middle class parents do all sorts to boost their child’s development using their financial resources . I used to teach abroad and everyone went to state schools where I taught, but the richer kids also attended these private classes for hours every day after school and it definitely showed.

and how about parents who buy houses in good catchment areas? Is that unfair/immoral too? Genuine question as I’m curious to see where this ends.

Isn't the argument usually "Private education should be treated as a luxury, and should be VAT registered" ?

No, it's that private schools are not genuine charities so they should pay VAT like all other businesses.

VAT isn't a "luxury tax".

VAT isn't chargeable on supply of education, so schools threatening to add 20% to fees are price-gouging. What is being proposed is removing private schools' exemption from paying VAT on their purchases of goods and services. This won't increase their staff salaries, so the impact it would have on the fees they have to charge would be much less than a 20% increase. And if their costs increase, they can reduce their expenditure. This is what every state school in the country has to do. When 93% of children are affected by cuts to the standard of their education and facilities resulting from increased costs with no matching increase in income, why should the other 7% just sail on with no requirement for their schools and parents to have to choose between cutting spending or increasing fees?

the vast majority of private schools in the uK are non profit making. Most are charities. I don’t send my kids private but what’s the point of making stuff up?

What about sports clubs which charge - shall we ban those too? Not everyone can afford it.

Private tuition. Ban that also?

Should we also prevent parents helping thier children with extra work at home. That's unfair too. Ban that?

Unfortunately it was the only option left to us as my daughter developed panic disorder and could not get back into school buildings. An independent online school was the only option. I will be pissed if I have to fork out for an extra 20%! I've received very little help from the support services that I'm supposedly paying for from tax etc!

cloutneerbeout and how long do you think it'll take for the labour government to build schools (fund that too after having to pay for x more number of kids who will then rely on the state for their education?) and staff them.

All those privileged people you're talking about will employ multiple tutors for their children, they'll still have the advantage that comes with wealth.

Less children from normal or underprivileged backgrounds getting into selective grammar schools.

Come the revolution there will inevitably be some bedding down over a few years but in the long term it will be worth it for a healthier and more equal society.

@cloutneerbeout I agree with you on that!

Personally I'm not fussed if some people privately educate. I don't agree that fees should attract VAT but I can see an argument for it being a good revenue earner. Those sending their dc to private schools will have to take this into account in their budgeting. If this results in more people using the state system that is likely to be to the benefit of the state educated children not currently exposed to the children being pushed by their middle class parents.

I don't think you can bleat hardship or ask for special consideration.

You don't pay VAT on university fees, why should private schools be any different?

University is also a choice for people who can afford it, you may even think it's a 'luxury'. By the same arguments you could also say that it leads to inequality because statistically university graduates are paid more, yet this is widely accepted and seen as desirable.

When my children were young, we lived in a fairly dodgy area purchased before children and schooling was not on our radar. Bit of a shock when we eventually looked at schools. So we went the private route. It meant doing without many things so we could get the best education for our child until we could move.

some people place a higher importance on their child’s education and does not mean it is a luxury, they may decide to give up luxuries in order to have money to do this.

what id like to ask labour, how would they fund additional places in current schools if there is an influx of children who previously went to private school, changing to state school because the 20% uplift due to VAT made it beyond affordable for their family. They need to plan for that.

THIS!!!!! I would never send my child to private school, even if I had all the money. It is so morally wrong to me and so elitist. Education should be a fair opportunity for all. However I know realistically they will never be scrapped, so yes the people who use them should pay VAT and it be treated as a luxury.

As riffraff, with riffraff DC in riffraff schools, I’ll consider overlooking the whole ‘doesn’t know what a woman is’ thing if Labour are making this policy.

However, Starmer needs to start acting like a grown-up in the room and explicitly draw a line under the gender pandering. He’s made himself look very silly indeed. As has Nandy, standing in front of an audience telling them that, yes, male sex offenders against children ought to be in women’s prisons if that’s in line with their genderfeelz.

Yeah, still some work to do there, Labour. Sorry.

Private school isn’t a luxury for most, it’s just a reflection of different priorities. My parents sent me to a private school and they scrimped and saved every penny and spent most of my school life in debt. They certainly couldn’t have afforded VAT on school fees. I now send my kids to a private school.

Labour bring up VAT on school fees every few years, but haven’t yet acted on it. I’ve seen the modelling on this recently from a pretty average (in terms of fees) private school in the Home Counties. That modelling says a third of parents wouldn’t be able to afford VAT on school fees, so that’s 200,000+ kids nationally going into state schools. And a huge loss of income for the school which is the third largest employer in the local area (after the council and NHS). Private schools aren’t “businesses”, all the money they make go back into the school itself, bursaries and the local community through connections with state schools. Because they have charitable status they are not profit making (and shouldn’t be).

I’m a high tax payer who is vehemently against the recent mini-budget and I would vote for Labour next time - but only if they got rid of this ridiculous part of their manifesto. For all the people who say they’re ideologically anti-private schools, there’s an equal number of us who are against paying the government twice despite not using the state school system!

Oh no. Is your wallet too small for your 50s? And you diamond shoes too tight?

Private education is a business.
Welcome to capitalism.

Most people who think this way simply use their financial privilege to buy property in the catchment of the best state schools full of other middle class children. Which is still buying access to a better education but allows them to feel good about themselves and their social conscience. I’m yet to meet anyone on your kind of income who professes private schools are immoral and sends their child to a failing school full of knives and violence. State schools vary. A lot.

I agree private schooling has serious moral questions but I struggle to take people seriously when they come out with stuff like this because I don’t believe for one minute they would send their child to any old state school, they’re just ok with the ‘nice’ ones in the ‘nice’ areas that they can afford to live in. It’s a sliding scale of privilege. Private schooling is at one end but let’s not pretend there isn’t a significant chunk of self-satisfied loud and proud state school using parents in the middle who have used their money to live somewhere that ensures they get ‘the right’ state school.

Life isn’t fair. I would love it if private schools weren’t a thing and all state schools were better resourced as a result but in reality the good state schools in the good areas would remain de facto private schools (by way of house prices) and inequality remains.

Its not as black and white as just saying private schools are immoral.

Absolutely.

Where I live, the total cost of private school fees for two children is less than the difference in house price between the a 3 bed semi-d in the catchment for the okay school, and a 3 bed semi-d in the catchment for the really outstanding school.

If it's just under 20k a year for 7 years x 2 kids, that's £280k. You don't have to do all the extras, and there are plenty of 2nd hand uniform sales etc.

Looking on rightmove now, a small 3 bedroom house in the catchment for a perfectly okay but not amazing secondary here is about 450k. That jumps to 900k in the fantastic school catchment (although there is one house there right now around 750k, which is unusual!).

If you're rich in my small city, you're not going private, you're living near the best school.