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!!

what that working class and not privileged?

no way! the army wasn’t paying for private boarding school fees for NCO!

2007 for example The Ministry of Defence paid out £100m last year to subsidise fee-paying boarding school education for the sons and daughters of military officers and some senior NCOs, The Herald can reveal.

but you’re saying 20 years previously they were?

in any event PP describes herself as coming from a high ranking military family

That’s Eton , Harrow , Uppingham , etc. This policy really makes not a jot of difference to them. People who pay for boarding will still pay and the schools will mitigate by recovering VAT on capex and introducing differential fees for overseas pupils

As previously discussed the ones who are worried are your local independent possibly ex Grammar day school who don’t have a big capital project every year and whose pupil base is much more sensitive to price . For most of these schools roughly 70% to 80% of their input costs are teachers and support staff salaries , no VAT to recover there or other costs like food also no VAT. Some of these schools are on very tight margins and I suspect t some especially at primary level and those that take a lot of children with SEN will fold./merge.

Yes, the whole post was a quote. You’ve got the wrong end of the stick and need to apologise to the poster.

@shewasrooting I agree with this, a sorry for getting it wrong could do

@shewasrooting - are you really still going rather than apologising?

And this is why hardly anyone wants to be an MP anymore. Vicious attacks on social media and in real life. 2 MPs dead. Misquoting, mislabelling, cliches, well done @shewasrooting MN Bingo

@shewasrooting

Hansard 1980

I think there are state boarding schools now where the education is free and parents just pay for the board which I think will be covered by the ministry of defence.

No, it is not. Labour have confirmed they will not be seeking to remove charitable status. All they are seeking to do is change the law so that Vat can be charged on education. This can go many ways, and it is not unfathomable that university education could end up affected. But it is absolutely not about removal of charity status.

There is no proposal to remove charity status.

Because of people being driven by jealousy, because people are short sighted, because people believed the shite on the bus about the NHS. So they will believe any old shite that chimes with their set of misguided beliefs.

I’ve read the whole thread, including the never ending misunderstanding over charitable status, and accusations against some specific posters.

I just wanted to dispel a view that some posters have expressed, which is that all parents who send their children to private schools are Tories and will vote against Labour anyway. I can assure you that is very far from the truth. There are loads of Labour supporters among independent schools - in fact I have very few friends who identify as Tories - they are despised by most doctors, teachers, scientists, lawyers, bankers and other middle class people who form the bulk of independent schools communities.

Some parents are very worried by the VAT policy. Some, like us, are not best pleased about it, but we are not going to vote for the effing Tories because of it. That doesn’t mean we approve of the policy, or that it won’t mean a financial burden - it definitely will. Yes we are fortunate that we can afford the increase, but it will definitely have an impact on our budget.

Yes I’m lucky that we can afford the independent sector. But we don’t have a car, we use public transport everywhere. Contrast our neighbours with their Porsches and Landrovers who send their kids to the local state school. Meanwhile we pay our taxes and subsidise the state education sector even though we couldn’t use it (we were not offered any local state school for our children so had to turn to private schools because of school place shortages in the baby boom years). Why are we being singled out for an increased contribution, when other people who earn substantially more are not?

Some posters on this thread have a very black and white, us vs them view of the world. Whereas the reality is vastly more complex. I’m not asking for a shoulder to cry on, but please don’t think that all parents who choose private schools are arsehole Tories.

i am sorry @Araminta1003 it was a stupid error on my part

Thanks @shewasrooting - I forgive you.

@Tuturkeykey - and many just simply won’t be able to make the budget stretch so yes it will loose votes even if by abstention.

then labour spent this week trying to woo the city. Any work they are doing there is destroyed by the policy.

Private schools have charitable status which is totally wrong and should be reviewed! Really hope they do charge VAT on the fees !

Except for the special schools dealing with severely disabled children etc... yeah perks for the privileged them...

Only around half of schools have charitable status, and that has nothing to do with the VAT position.

Actually it does as charitable status means vat excempt

Chartered accountant working in school finance here

No it doesn’t . VAT is a tax on the supply not the supplier . Firstly independent schools currently pay VAT on anything Vatable that they purchase, unlike state schools they cannot reclaim this . So they are not exempt from paying VAT and in fact pay quite a lot of VAT .

Secondly, they do not charge VAT on their fees because education is an ‘exempt supply’. That means that anybody charity or not ( and only about 60% of independent schools are charities anyway) who supplies education will not charge VAT on that supply. The proposal by Labour is to make education a ‘chargeable supply’ ( we do not know yet if it will be standard rated) , if this happens then the schools will both charge VAT to the parents on the supply and reclaim any VAT suffered on purchases attributable to that supply .

As @cyclamenqueen has pointed out, you are incorrect. From the government website

“Any business (and this may include a charity or its trading subsidiary) that makes taxable sales in excess of a set figure, known as the VAT registration threshold must register for VAT.
Taxable sales are business transactions that are liable to VAT at the standard, reduced or zero rate. Guidance on whether something is a business transaction can be found in section 4. Many charities make taxable sales and if your level of income from those sales exceeds the VAT registration threshold you will need to register for VAT. This is not optional and there are penalties if you fail to register on time.

If a charity’s income from taxable sales is below the VAT registration threshold you can register for VATvoluntarily. But if a charity’s income from taxable sales is below the threshold, and you do not want to register for VAT, the charity does not need to charge VAT on any of its income. The charity should check regularly that it is not exceeding the VAT registration threshold.
But a charity that makes no taxable sales, either because the charity has no business activities or because their sales or income are exempt from VAT, cannot register for VAT.”

This is why the policy is a ridiculous one. A large number of the people who are in favour of it don’t even understand how VAT works, and the charity position.

And, for clarification, even the Labour Party have dropped plans to strip schools of charitable status.

Private schools don't have to pass the cost on. They could absorb the increase. They could make savings, find efficiencies, sell assets, like every public sector organisation has had to do over the past 14 years.

I find it alarming how many people haven’t understood that charitable status and VAT on fees are unconnected. (And also that Labour u-turned on the charitable status).

It’s a bit concerning that people will vote on the basis of supporting this policy without the faintest understanding of it or its possible implications.

My kids are state educated but we pay for loads of educational stuff privately, as I’m sure lots of families do. Some tutoring, drama, football, swimming. All those things are unfair advantages, just like private school - anything private and educational is an unfair advantage for the privileged. And I can’t afford an extra 20% on top.

Exactly this. The number of people who are in favour of this policy, and who will vote as such, and yet don’t understand even the basics is worrying.

To be fair on the public though, the media and Labour Party have been suggesting for years that stripping them of charitable status would mean VAT is chargeable. Even they don’t understand it.

Everyone is entitled to their own opinion on this, obviously, but if you are going to have an opinion, at least make sure you’ve understood the basics. People are still posting factual inaccuracies on these threads, despite having the facts pointed out to them numerous times. They seem blind to the reality and, for some reason, unwilling to learn about it.

No it doesn’t . VAT is a tax on the supply not the supplier . Firstly independent schools currently pay VAT on anything Vatable that they purchase, unlike state schools they cannot reclaim this . So they are not exempt from paying VAT and in fact pay quite a lot of VAT .

You’ll have a better understanding of this as I’m not an accountant but in addition to what you say, my understanding is that if the schools start having to charge VAT on their supplies, they’ll be able to reclaim VAT they’ve paid on, for example, their building projects (which they currently can’t do) - and they’ll be able to make those claims retrospectively (up to 10 years I think?)

So the Treasury will end up paying money to the schools. Which could be a large amount.