To think taxing private schools...

[maddening]

I have no skin in the game, my dc is at a secondary state school. I have no strong views on private schools - although I think state should offer the same level for all dc.

However, looking at the maths I am not convinced the cost and benefits of this proposal works out - apparently vat will bring in 1.3 billion - however if the 554,000 children in private schools had to be schooled in state schools that would cost 4 billion - aibu to think this is not the win that many are led to believe? It is more divisive imo and driven by ideology.

If the private school parents are saving the state 4 billion a year then I don't have an issue with the vat personally.

I think that there could be more requirements placed on private schools in order to retain the vat free status, such as sharing facilities with local state schools and more subsidised places perhaps, or means tested vat relief for parents?

There are plenty of international PS in Europe of great performance etc -moreover people with money are much more mobile -my bosses live between few countries but choose to pay taxes here -they can easily send their kids abroad as well as move abroad themself and the nature of business they can actually transfer that business oversees meaning loss of salaries for a lot of people as well as loss of tax to the government from those companies .

I am fascinated at the support for this VAT change -my son has Disability and SEN likely to end up out of school for secondary as his need can’t be met there etc -the nearest suitable SEN school for us is over an hour drive one way -with no spaces -so..people talking about equality -inequality happens !if more kids are educated PS less crowded schools etc -means more more SEN kids can actually attend those state schools

I'm assuming you don't have private healthcare?
Myself and DH do and, I can assure you, it's certainly not about being able to 'jump the NHS queue'; it's about being able to pay for treatments, services, surgeries that the NHS can't - or indeed won't - provide. We have BOTH had to use our insurance for this in the past. And it's worth every penny.

It is the same for health care. Because wealthy people would demand a better service from the nhs if they didn't have private.

Also when you use private healthcare it's the same doctors that work in the nhs, so yes, their time is pulled away.

I 100% think that if you're going to tax private schools you should tax private healthcare.

But I am confused why some people have a problem with this? Is it because they don't have children in private school but have private healthcare? Oh please tax the thing I don't use, thank you.

You have bought into the hyperbole of "tax break" language.
If you want to talk about tax breaks; every private school kids relieves the pressure on the state as the state isn't paying for them. Add to this many private parents are higher rate tax payers. How do you then calculate that we are getting a tax break?
If you want more private kids in state education/to reduce private education then you have to accept that will cost the taxpayer 7-8k per child per year.

I don’t understand your reasoning why you think you are subsidising and I say this as someone without kids in private school. It isn’t costing you a penny more if someone chooses to send their child to a private school, in fact it costs the tax payer less as the amount they’d be paying for the state school place no longer needs to be paid. My child is in a specialist school (la maintained not independent) which is funded by the la at £30,000 per year per child, so if anything you are subsidising my child

So how do you feel about gambling being VAT free?

My kids don’t (& won’t) go to private school and are not going to have any issues getting into good state schools. I think the policy is stupid. It’s like the removal of child benefit over 50/60k or free childcare hours over £100k. I find the policy very weak and it surprises me how many people seem so pleased about it. Headline grabbing and gives people the idea the party will tax the rich but honestly is pretty insignificant in terms of increasing revenue for the state (if it does at all) and still fails to really target wealth.

Most Private schools are NOT businesses. This is poorly understood. They retain their charitable status by being trusts and any excess monies go back into education. No-one makes money out of private education.

Once legislation is changed so VAT is applicable on education, so many potential other services will be in the firing line.

VAT on nursery fees (as a Government subsidy for private services is in place could be one.

Uni fees could be another & Private healthcare.

All these, including taxing any form of education, is counter productive and a race to the bottom.

Yes, this is a gateway policy for VAT changes (VAT on fresh fruit and veg anyone?)

A more sensible option would be to let every child's state school money travel with them and have parents top up from there. That would widen access to the best schools rather than narrow it. Private school parents are not currently getting a tax break. They are saving the state 7k per year by sending their child private and paying the full cost of their child's education. If those kids move into the state system the tax payer then foots the bill. It's illegal in the EU to charge tax on education services.

Private schools disproportionately fuel the London work force. Without London the UK would have GDP of Mississippi....ever been? I have. I don't recommend it. Over half of the UK taxpayers are net recipients meaning they receive more in benefits than they put in. That's a ridiculous state of affairs that is hugely precarious. We are a service based economy who produce very little. The top 10% of tax payers pay 60% of tax. There is no magic money tree. Without that top 10% you would have to dramatically slash benefits. We need to make sound economical decisions not emotional ones that 'stick it to the man'. People need basic education on how the system actually works.

I have absolutely no issue with children in need of a specialist education being fully funded for that. That is as it should be but sadly, all too often it is not thanks to budget cuts.

Private education most definitely does have a cost to the public purse though.

https://theconversation.com/the-public-cost-of-private-schools-rising-fees-and-luxury-facilities-raise-questions-about-charitable-status-182060

It is not possible to state with certainty how much the UK’s charitable private schools save through tax exemptions. However, a good estimate according to our research is around £3 billion a year. This equates to more than 6% of England’s total state school budget (£47.6 billion) in 2020-2021.

... ... ... ...

Private schools benefit financially from the tax exemptions that arise because of their charitable status. Their operating surpluses (profits) and capital gains (profits on the sales of investments including shares, land and facilities) are exempt from income tax, capital gains tax or corporation tax.

In England and Wales, private schools also receive an 80% discount on business rates (local taxes). Furthermore, they can claim 25% of all donations received (such as chancellor Rishi Sunak’s donations to his old school, Winchester College, which reportedly exceed £100,000) from the tax authorities in gift aid.

This suite of tax exemptions arose principally from a legal and public campaign conducted by the Headmasters’ Conference in the early 20th century, and have remained largely unquestioned ever since. Charities that provide education are also, under a 1977 EU Directive, exempt from charging VAT, while bequests to schools are exempt from inheritance tax.

The total scale of these tax expenditures is mostly unknown. The Labour Party estimated the annual value of VAT forgone by the state from charitable private schools was £1.6 billion in 2019. In 2021, it estimated the annual value of these schools’ business rates discount and income tax relief to be around £100m and £700m respectively. In all, we estimate the total value of private school tax exemptions could be in the region of £3 billion a year.

... ... ... ...

The fact that UK higher education is still significantly state-subsidised means, in effect, UK taxpayers continue to fund privately educated students during their university studies. Such students’ disproportionate representation is a serious opportunity-loss for state students, many of whose schools are suffering real financial hardship that negatively impacts their students’ educational and career outcomes.

Because most private schools invest the surplus back into the school. They don't make money for shareholders etc. The surplus goes towards things like bursaries and scholarships, improving facilities etc.

Some people will possibly argue that fresh fruit and veg is also a privilege and luxury and is to be not VAT exempt and only potatoes should be VAT exempts as this is basic food

Your mistake is in thinking that those highly paid jobs would cease to exist without privately educated people. The jobs would still exist and the people with the ability to fill them would still exist. It's just that in recruiting for them the net may need to be cast a bit wider than the old boys network. Privately educated people are not inherently more able or more skilled because their parents paid for their education. They go to the same universities as the plebs from state school. They might be more likely to get a place there because their paid for education got them better grades or taught them how to present well at interview, but as the BMJ article I shared earlier showed, that's not necessarily a good indication of how capable they are.

Frankly, your attitude towards people with a state education is shocking. It's attitudes like that which close doors for people, not lack of education or ability.

Yes, as the article says, it goes into providing more luxury and better facilities for the already very wealthy families that use the private school. It doesn't do anything for "the poor" beyond a few token gestures.

Private education most definitely does have a cost to the public purse though.

The estimates in your article says that the tax exemptions amount to £3bn. Let’s assume that this is correct. Let’s also overlook the fact that state schools also get many of the same exemptions. And let’s overlook the fact that private schools already pay input VAT whereas state schools don’t.

How much do you think the state is saving by around 600,000 children not using the state system? The answer is a lot more than the value of the tax exemptions, so there is no “cost to the public purse”.

This equates to more than 6% of England’s total state school budget (£47.6 billion)

Interestingly about the same percentage as there are children in private school.

The cost of educating 600,000 children at an average of £8k a year in the state system is more than £3bn.

@Iscreamtea I don't think you understand my position. I am state educated myself. I am entirely in favour of abolishing an old boys network. I was part of a senior management team that decided to go to completely blind recruitment when it came to schools/universities. It made it worse! If we didn't purposefully give the state educated students a leg up, they got through at a lower rate. Before the blind recruitment we our rate of hiring privately educated students was 50%. After the blind recruitment policy it rocketed to 75% of all hires being privately educated. The state schools in this country are simply not up to scratch. They are massively underfunded and forcing more kids into them won't help. They need to be properly funded first before we throw even more children into them.

Your point about those jobs still existing doesn't hold in a global economy. You base the jobs where you can find qualified people (among other factors). We have a huge number of foreign workers on secondment contracts because we simply can't find the candidates in the UK.

Bizarrely the ones that tend to be businesses are the independent specialists for children with sen. They often charge upwards of £80k a year per child which is funded by the government through the local authority. They are business so do pay corp tax on profits but a significant proportion of the approx £80k per child is paid to shareholders and doesn’t benefit the children’s education at all. To me this is more scandalous that no charging vat on private school fees

Well it depends who you are looking at I suppose. Those luxury and better facilities are built and updated and have VAT paid on them, which cannot be claimed back, as charitable trusts.

My DC's private primary was in a constant state of disrepair, and as a listed building was horrendously expensive to maintain. I went in the 1970's, the toilet blocks were the same when my children went in the 2000's, including the open running water in channels from the basins, and the pull chain toilets! The PTA raised money to get it updated. It had so many heritage issues to repair, that day to day stuff could never be done. The same oak lunch tables, and benches were still being used as well. The PTA had to fund raise to fix the conservatory roof, to heritage standards. This was a tiny one entry, non-selective, in a small Georgian house, previously a convent.

The PTA also did much of the gardening.

It offered a few bursaries every year, but quite frankly always ran at a loss. I wonder whether it will survive.

@KnittedCardi it sounds like it was struggling before this proposed plan which hasn’t even been implemented. I guess the CoL crisis hasn’t helped.

No one makes money out of private education?

Nonsense. There's a school along the road from me, it's owned by a private proprietor who absolutely does make money from it