To think that people who agree with VAT on private school fees but not on university fees, are hypocrites?

[Blanket601]

If Labour add VAT to private school fees, they should also add VAT to university fees. Or no VAT on either. The principle and rule, should be the same.

Why is only private school education being platformed. I think we all know why.

If you can’t afford private fees then send your kids to state schools. It’s pretty simple.

But most private schools are not businesses. There are no profiteers. No shareholders. The money goes back into education. So of course they should not pay business rates. Why would they? Businesses exist to make money. Most private schools, to educate

Why would schools pay vat on donations? Give your head a shake! Why can any school not receive a donation without the government sticking a mit in?? Are you proposing vat on bake sales now?

@Snugglemonkey

I was talking about gift aid.

If a school receives a £100K donation, they can claim back £25K from HMRC. I.E the taxpayer.

https://www.theguardian.com/education/2023/mar/12/uk-private-schools-rush-to-expand-overseas-as-profits-soar

Do you think that article contradicts snugglemonkey? The first paragraph fits exactly with what she said: the money is going on their charitable obligations (education) not to pay shareholders as there are none. You might well not agree with the practices described but it certainly doesn’t show her to to be incorrect, which is what I assume you were implying as you didn’t comment.

Bollocks there are private universities like Buckingham. Get your facts right

I’d be sort of okay with having VAT on university fees too if we also had means tested grants to students to ensure everyone can access. I know a lot of people, even on the left, were up in arms about the introduction of university fees, but free uni education is, overall, a massive transfer of wealth from the government to the wealthy, I’m okay with not subsidising the wealthy again. But, since education is a public good, putting VAT on uni fees would probably lower the numbers going and, overall, be a net bad for society, but I do wonder where that would hurt the most and if it might still make for a more just society…

I’m also okay with VAT on private school fees pushing lots more children in to state school (as so many anti-VATers seem to forecast as a scare tactic). It will, for a start, result in more pressure on the government to improve state schools. That will result in a greater burden overall on the public purse but I’m fine with that - a greater investment in education for everyone is far better than it costing less money overall but a few benefitting greatly and the majority getting stepped on. We can invest significantly more in education than we’re currently doing and it’s an investment with significant pay off.

We need a fairer society with less wealth division. I’m all for steps which help achieve this and VAT on private school fees will help, though it’s not nearly enough.

Pulling the plug out the bath so all ships are equally on the bottom, is rarely as beneficial raising the sunken ships.

If the idea here is to get more money for state schools there are far better uses of the legislative time on.

1. Simplify the tax statutes, this probably involves lots of revisions to vat but I doubt education is one of them.
2. Revise the nonsense of property taxation.

• scrap sdlt and charge CGT on all property: so if you have made a barrow load of cash (often due to public investment eg rail/road) then you pay this. If you have to move in short succession ( for work or to care for a loved one) you arnt crippled/ give up on this positive economic move. Tax rate could have EPC factored in.
• progressive taxing based on occupation of the property Vs it's area and energy efficiency.

1. Health and social care

• put it all in the same organisation so LGAs and NHS don't play pass the buck. This will unblock beds, and get ppl back to work.

1. Education

• early years education: each child gets 30 mins state subsidised childcare from 18 months for each hour there parents work.
• primary: align school provision with the modern family needs. Parents can participate more easily in the workforce with integration of more currently non core activities into the curriculum.
• every child has a pot of money attached to them for there education, this can go to any institution which teaches to a nationally recognised minimum standard. If parents wants to pay more for a swimming pool then why not let them.

In summary

1. Make tax easier to collect and more difficult to avoid
2. Deal with house price inflation, and local government short falls
3. Invest in provision not bureaucracy
4. Improve state early years and primary school provision supporting carers back to work. Have a good minimum standard and let parents do what they think is best for there child and pay accordingly. (As many have pointed out they are going to do this anyway, with tutors, clubs etc)

Lift ppl up dont beat them down

Because private schools benefit the very few. University is accessible to all. Everyone should be able to attend uni if they are good enough and it will help their career. Maybe they could make the private school students above a certain income pay the VAT on uni fees too? State students and poorer families shouldn't have to pay it though. Why should they?

Surely a greater link between society's needs and university education would be a better starting point. We need more doctors and engineers with degrees and fewer estate agents and call centre managers.

Universities have become bloated with fat cat administrators, entitled academics and white elephant capital projects. They should be more responsible for there own student loan book creating a direct link between there ability to select, educate and grow. Like every other entity if they consume more resources than the value they produce they should cease to exist.

Government can step in in some cases for example medical staff to offer support to the university/ student after they have served there time in the NHS.

On your anti vatter point I'm not sure you have considered the risk here. Let's say the top 1% pay 18% of all tax, and are the most socially mobile. A 7% relocation of this group chops a 20% hole in the DFEs 0-16 budget of £46bn.

If you want more money in the public sector you need to simplify tax, not make it more complicated. Less exemptions with a slightly lower tax rate.

If you make it based on income then the wealthy will just rearrange there finances if it's beneficial to do so. For example take a pay cut to £50k ( as it's the governments favourite number) and pay the rest into there pension while there children are at university.

What your saying here is let's tax the working professional in the middle. The radiographer, vet, sales manager.

This insanity of university funding based on there parents income. Logically this would lead to social care and pension for the parents being based on there child's earnings. I got caught by this, no parental help I worked and paid rent to live at home I regret even going to university.

To extent I see the argument on uni subjects, though even before the expansion in higher education, most graduates did not go into a vocational job or one that directly required their degree subject. Also there are public good arguments for a university education regardless of career - graduates tend to be less likely to commit crime, they live longer and their children do better on most measures. Though it would be interesting to see if those correlations held true across the board with graduates now that unis have expanded so much. But I’m not against encouraging some subjects over others (medicine is a bit questionable though, since we aren’t currently employing enough medical graduates and they are scrambling for jobs at the end of an expensive and grueling 5 year degree).

And yes, a relocation of top tax payers out of the country will leave a hole in the budget. But the damage they do to society far exceeds the tax they pay IMO, so I’m okay with that too. Let some other country fete the parasites.

High wealth inequality leads to worse outcomes for populations in health, education, crime and a bunch of other quality of life factors. They are well worth losing some tax over.

@RawBloomers

Surely this is a bit of a daft plan you are throwing the baby out with the bathwater. The 97th percentile include small business owners, accountants, software engineers, lawyers, architects, alot of these people send there children to private school. They also have alot of agency on where they live and work.

It's churlish to say that we wouldn't miss them in our society and the associated tax income.

Many of the jobs that don't have direct contributions to a social benefit are key to the export economy. I would have hoped that there was a broad understanding of the effects of market confidence on our standard of living after the Liz Truss fiasco and brexit, devaluation of the GBP & spiralling inflation.

Nut job policy which devalues the GBP and drives up the cost of living just make it more attractive to move. Doctors are qualified in Australia, with twice the pay. Software engineers can become digital nomads and management accountants are qualified in the USA.

If labour is serious about raising the standard of living start with simplifying tax, look at property taxation, align public sector pensions & working conditions with the private sector. Revise the state pension to a defined contribution system. Align the NIC of the self employed with the employed.

I don’t think we’re going to lose that many of them, tbh. But I would be okay with driving a lot of them out and resetting the economy if it lead to a less elitists society. What has happened since the 70s in terms of wealth inequality is a tragedy for the country.

I don’t disagree that there’s a lot more that needs doing than depressing the use of private education. I actually think bringing back some union power would be more effective than changing tax, though.

Can you explain how parents using free taxpayer-funded schools costing £8-12k a year per child are subsidising independent schools that don't cost the taxpayer anything?

You'll need, of course, to concentrate on the segment of the population that actually contributes tens of thousands a year in taxes, because you'll be aware that lower-earners don't subsidise anything.

The bit about "pressure on the government to improve state schools" is a massive assumption, and I believe it's wrong.

Do affluent state school parents, today, put pressure on the government to improve state schools? In general no. They put their famous sharp elbows to securing a great place for themselves, POSSIBLY throwing a shoulder behind "their" state school, and then spend their money on (VAT-free) tutoring and extra-curricular activities. There is no sign of them pushing for improvements to struggling state schools in struggling communities. Like private school families, they're obtaining great outcomes for themselves, and unlike private school families they're benefitting from free taxpayer-funded schools.

You're assuming private school families "pushed into state school" will behave completely differently. Why do you assume that? Especially as (1) they'll be starting from a point of "pissed-off" because the government just disrupted their children's education (2) these are parents who, for whatever good/bad reasons, don't rate the state system today.

Pulling the plug out the bath so all ships are equally on the bottom, is rarely as beneficial raising the sunken ships.

But that is Labour’s speciality..

Exactly. The parents who have to move from private to state, will spend more money (they will have much extra now no school fees) on getting a house in a ‘top rated’ state school area, and spend money on private tutors. No more no less

This. We have 2 kids in private. Most ‘normals’ ie people like us who earn relatively well and save/ stretch to afford the fees will be priced out and have to leave. All the super wealthy types- inheritance, grandparents paying fees will be fine so you’ll just end up with a super elite at private school. The generalisation that most people at private school will stay isn’t what many parents I know are saying. The state schools will be overwhelmed, lots will have to leave.

I suspect a lot of these independent schools will become "specialist SEN" schools...

Yes let's make university education elitist again. And presumably find jobs for all the 18-21 year olds that get out priced or let the benefit system support them.

University education is and should be accessible to all.

Private education is a privilege

Means tested vat or a tax relief? Seems reasonable

Privilege means "private law or special arrangement". It doesn't mean "something that people have to earn taxable income to afford."

Education is a merit good. Every private school place both saves and generates £££££ for the taxpayer. The saving on state education alone is worth 3-4x the value of the tax exemption. If you include the taxes paid by the school, including the VAT (which independent schools pay on capex and supplies, but state schools don't) it's even more. If you include the taxes on the income required to earn the fees, it's around 10x.

And that's an extremely conservative estimate. The best possible thing for state education would be more private schools - and the former would look absolutely ridiculous without the latter.

@MisterChips

I meant privilege as an advantage available to some but not all

Right, as I said. There is no "special right" to private education. It's something you can buy. Did you notice the irony that both examples of "privileges" in your dictionary relate to state officials?

This might help

https://mrchips4schools.substack.com/p/newspeak-liberals-and-privilege-parents?r=rco7z

If you do buy it, you're helping out the state sector to the tune of between 3x and 10x the value of the "tax exemption". How's that a "privilege"?

It's also not an advantage compared to receiving a top state education for free paid for by the taxpayer. Plenty of state school kids achieving top Oxbridge / Russell Group places, many of them from affluent families, and able to spend their money on catchment areas, tutoring, skiing holidays and still save enough to buy the kids a flat.