If VAT is added on Private School Fees, then it will be added onto University fees as well

[AgathaCrispee]

Does it worry you that this new policy of adding VAT on educational fees will also be applied to university fees as well?

AIBU to think this will put university out of the reach of the majority of families who will support their kids through Uni?

Also, for those who do go the level of debt they will come out with will be really big.

If they can apply VAT to private school educational fees then they've setup a case for Independent schools argue that it must be applied to Uni as well.

Is this going to create a situation where only the wealthy can send their kids to Uni?

I'm wondering why no one is asking this question!!

His parents chose to send him there.

You would be surprised how it’s not the “privileged few”.

please do some research on this and understand how this will impact social mobility for many underprivileged children who currently attend for free since the Labour Party closed the grammar schools.

I personally don’t think it’s dangerous but from the governments point of view it would open the door to potentially having to increase funding every time a public body was subject to a tax increase . Imagine if the VAT on energy was increased , should central government then compensate any publicly funded body affected to cover this , what about NIC , if the cost of employing people goes up will they want to be automatically bound to cover this , unlikely. They are likely to just tell the councils to suck it up, the policy is meant to increase tax revenues not cost money . However there’s the rub, this policy will actually raise barely anything, it’s about culture wars and dividing people and that’s why I disapprove of it.

As an aside I think they could make the basic changes just by amending the regulations, I don’t think it would need a change in the law.

Rather than telling people to "do some research" why don't you post a link with the statistics showing that a huge number of "underprivileged children" are benefitting from private school. Where I live very few are.

University is “essential”. no it really isn’t unless you plan to be a doctor or engineer.

If “private education” is to incur VAT then logically this must include all at work training and day release courses, this would include university. There is currently an unlevel playing field that vocational courses are charged VAT. That means a trainee plumber is charged VAT but a lawyer isn’t. Hardly seems fair does it…

Further, if the education exemption were removed this currently would include university and any “private tutors” or similar which are currently exempted.

THEN THAT ALSO INCLUDES PRIVATE NURSEY SCHOOLS. yummy mummies beware the Montessori will be next!

you then have to ask about after school clubs and if these would include VAT.

then what about English as a foreign languages… so it goes on.

coffeeaddict77

Here you go:

https://www.goodschoolsguide.co.uk/digital-media/blog/scholarships-bursaries-means-testing-private-school/amp

What makes you think that government funded bodies are never compensated for an increase in costs? Funds are increased all the time due to cost increases. They don't remain static.

You seem gleeful at the prospect.

look at it this way, is having a university educated workforce good for the economy? Hell yeah!!! Pays us back in bucketloads. Same as nurseries. Private schools? Of course not.

Hercisback

If it will raise 1% of the budget - How many kids will end up in state as a result - the amount raised could easily be wiped out by the 1% extra funding needed in the state system.

@coffeeaddict77 I have worked in education and the public sector so I know that they are , I just think that they won’t with this but I may be wrong . I have a family member at one of the schools you mention so I hope I am wrong but I’m not holding my breath

Conceivably governments can do anything they want. However, it is not in a labour governments interest to increase Uni fees. It is in their interest to increase private school fees

@Thesmokinggnu I agree. It's a totally shit policy designed to grab headlines.
I hope it doesn't happen for many reasons.

For the benefit of doubt I would rather the state system was better and private schools were effectively redundant.

unfortunately too many state schools are poorly run and fail the students in them. I have two kids in state school but had to pull the third out due to the state school consistently failing to deal with another child that was massively disruptive.

I don't believe that 30% of children at private school are "underprivileged" Where I live most burseries are given on academic, music or sport merit rather than financial. Only 7% of places are completely free so parents usually just get a reduction. If parents can afford a few thousand I don't think their child is underprivileged.

coffeeaddict77

i am probably screaming into the void here

but there are many of the 7% who would now have to go to state, and then what about those that have a bursary and so would have to leave because the bursary currently makes it affordable.

suddenly the numbers shift and the policy makes HMG a loss and just costs ordinary people. Then the gap widens to the most privileged in terms of social mobility. All for sound bites at an election they will win anyway.

https://www.thesecretgarden.org.uk/

What about these types of independent schools that cater for SEN provision and are often paid for via EHCP funding. The most vulnerable children will be back in schools they can't cope in.

Obviously my dream is for a fully funded state sector that is so good private isn't needed. But 1% budget increase isn't going to achieve that.

I appreciate that some people who might have gone to private schools maybe wouldn't if VAT was charged but if the money from VAT was used to increasing funding for state schools it would be fairer overall. It would probably be better if they only charged a low amount initially though and they could then see what happens.

Does anyone know if private schools can voluntarily give up charitable status?

If they have to tax pass on VAT on fees to parents and don’t get business rates exemption anymore and are treated just like private schools making a profit, but still have to do charitable stuff like bursaries and community engagement, then are they not actually going to be incentivised to give up their charitable status? And what then? Are Labour going to fund hockey pitches and swimming pools again?
I think the top 100 rich private schools will keep the charitable status as they can still attract donations but the rest, why would they keep it?

Giving up charitable status is very complex legally. The charity is a legal person in its own right .

The College of Law was a charity that provided education. It gave up its charitable status to become The University of Law. Part of that process was setting up The Legal Education Foundation.

https://www.gov.uk/guidance/how-to-close-a-charity

Losing funds or funding is one of the listed reasons.

Algamations/mergers are definitely allowed with permission. Maybe we will start seeing the equivalent of MATs in the private sector with lots of offsetting of input/output VAT/land sales etc. I always thought the competition between private schools is a bit strange and similar ones should at least streamline their admissions processes. They could save a lot of money that way and also on marketing if they sit in one big private school MAT.

It was just a few days ago.

Sorry but how does it 'hit the wrong people', for a start it is a very small percentage of people that attend private school, by default they're the wealthy. Like everything the systems and structures just benefit the very wealthy now, it is the principle of the situation that is therefore being challenged! The dissonance is too intense, people want to see a resolve of that gap between the richest and poorest people- In 2020, the ONS calculated that the richest 10% of households hold 43% of all wealth. The poorest 50% own just 9%. It is physically evident everywhere you look and is thoroughly depressing, who wants a society that is so unequal. Even those that were once financially well off, have limited purchasing power and debt, resulting in the state of the economy being dependent on the very rich, this is not exactly a good prospect for most of the population! With this being about tackling that principle, I think university fees don't come in to it.

How do you word it though so that VAT is applied to some types of education, but not others? Without leaving loopholes to be exploited.

Do you say that provision of educational services to under 16s is considered a "luxury" but to over 18s it's not? Where do sixth form and FE colleges stand? What about extra-curricular classes, will they be taxed and how do you define them? What about tutoring, should that be taxed? Do you say that Kumon's remedial teaching is exempt but anything that goes beyond that isn't? It's a real can of worms.

With physical goods things are much more clear-cut, though that didn't stop there being a court case over the matter of whether a Jaffa Cake was a chocolate-coated biscuit for the purpose of taxation.

I've a feeling that they'll shelve the idea once in office. Particularly considering that they've stated their opposition to any divergence from European legislation - taxing education is banned by the EU.

Remember that, even if the wording is not completely precise and might arguably cover some non-school educational services, there is nobody who will actually want to make that argument in court.

The non-schools who are arguably caught obviously won’t want to say the wording covers them too.

The government won’t want to, as it clearly wasn’t the intention behind the legislation and would be a political own goal.

The private schools who are caught won’t be able to argue that some non-schools are also caught, because it doesn’t directly affect them (so they don’t have standing). And I doubt they’d want to anyway.

This contrasts with the Jaffa Cake case where the manufacturers had an obvious motive to argue about the definition.