To not see how the gov will make any money from taxing private schools?

[AngryHedgehog]

All the other threads seem to have descended into bunfighting over the ethics of the policy, yet I'm not really understanding how this stands to benefit the government as surely they'll be footing the bill for all the kids that move to state schools?

As a disclaimer, I don't have kids and wouldn't be able to afford to privately educate them even if I did, despite earning a half decent salary.

I'm reading that it costs around £7k per pupil per term, so it would take the VAT from around four families to fund each additional child moving to state education.

Given that this may be 4/10 kids in private education moving to state schooling, I don't see how this doesn't create a net loss as there will only be 50% more kids left in private education and there needs to be multiple times that for the VAT increase to foot the bill.

Surely I'm missing something here?

In how they bring in money. I mean lots seem to have nice land and are empty mostly during the summer.
My friend taught at one which offered accommodation in the summer like universities do.

Yes that’s a good idea. As you say, some do already - I know Eton does, and Marlborough has a thriving summer school.

I’m sure you are in a better financial position than most and you could do we did when we moved to state and put money aside for tutoring. It’s disruption but not the end of the world. You will adapt. Just like lots are adapting to CoL crisis.

It’s almost like you’ve never seen the report in your life?! Have a good read and look at citations if you’re confused about the methodology. https://ifs.org.uk/sites/default/files/2023-07/IFS-Report-R263-Tax-private-school-fees-and-state-school-spending.pdf

That's the IFS report. I was referring to the Baines Cutler report.

The former predicts a 3-7% reduction whereas the latter says 25%.

30% of Scottish pupils are at private schools

Edinburgh pupils, not the rest of Scotland. Though there are a good number of private schools across the rest of Scotland

Our school have said a 4-8% rise in fees as usual and then probably around 15% for VAT. Ffs this will have a huge impact.

Remember VAT applies to the rise in fees too

Nope you’re 100% correct. It doesn’t make any financial sense- It’ll end up costing the UK taxpayer more. It’s a policy put it in gain voters unfortunately! I’ve been sat on school boards looking at this and am a teacher in a state school- we can’t cope with the applications coming in- there is no room for more children into the state sector and the admissions from private school children moving into state is huge. As a mum who has kids in private school- both of us work- and have put our children into private schools for the wrap around care they provide so we can both do our jobs- we are thinking if we can afford it going forward. It’ll be cheaper for me to leave my job as a teacher and not work and take my children to state school each day under the new policy- we’ll be much better off without me working and moving the kids! Not sure who is really gaining here as the private school allowed me to do my job and my husband his!

Yes, the impact will be huge. People saying “tighten your belts, it’s only a tiny bit more” really have no idea. Current £20k fees with 6% increase plus 15% VAT would be around £24,400 - a rise of £4,400 per year per child. That will often have to be paid out of taxed income. Assuming an income tax rate of 40%, gross income of around £7,500 will be needed just to pay the increase.

Yup!! I know.

so we are looking at around £7k rise in fees for our two kids in one year

doesn’t make any financial sense- It’ll end up costing the UK taxpayer more. It’s a policy put it in gain voters unfortunately!

Yes, Labour probably know it doesn’t make financial sense but they couldn’t care less.

I am hoping it is just campaign rhetoric and there will be a more robust assessment if they gain power.

so far Labour’s statements have been quite antagonistic with promises of immediate enactment (so zero analysis), though some of Starmers’s most recent comments suggest he is trying to introduce wiggle room by talking in terms of we will ‘start working on this’ from day one - very different from immediate implementation.

I am self employed so pay Income tax, NI and Corporation tax! I employ a bookkeeper and an accountant, as well as the employee in my business. I feel like taking them out putting the pressure back on the state. Working less, spending more time with the kids.

just such a backwards step for this country.

I could almost understand if the policy was going to raise money for state schools, but it isn’t. Even the IFS have said it won’t raise any meaningful amount.

I read a recent article (which I can't seem to find again) which mentioned that Labour have reinstated one of their advisors who was previously known as a big advocate of increasing taxes. One of the current proposals was to raise VAT for self employed people earning >£50k by 300% - sounds a lot but was going from something like 3% to 9%.

Wondering if anybody knows anything about this?

A policy like that would hit a lot of the tradesmen I work with extremely hard. Many of them are earning around this figure, and VAT tripling would hugely impact their cost of materials.

I could only see this going one of two ways. Either the end customer foots the bill through increased prices or a lot of tradesmen start paying cash and keeping it off the books (already a big problem).

That's an interesting point.

Those that can't afford the increase and move their kids to state schools may actually end up better off financially. In some ways the policy may benefit wealthy families more.

Those with their kids already in state education don't really stand to gain much. Possibly they'll fare worse if class sizes increase and they can't afford private tutoring etc.

Yes 🙌

Bascially - the only way me and my husband can both work the hours we do is to have our children in private school as they offer wrap around and also after school clubs like football that we can’t take them to. Nannies and childminders and other after school clubs are few and far between so we can’t rely on using these so the school they are at now offers what we need.

If the fees increase- we would be far better off financially stopping me working and moving the kids to state school and then the children doing normal hours. Our local village state school doesn’t offer wrap around so me doing my job becomes a problem . And then I’ll take them to football etc after school.

So the government will be losing a state school teacher and we will be using our education allowance for our children from the government which we haven’t touched so far. On the plus side to this- we don’t have expensive cars, live in a 3 bed semi and don’t go on expensive holidays. So we said well now we can do a few more things if we move out children to state school - even with me not working!

We don’t want to move them as they are so happy and it works well for our family life. But we can justify another £4500 per child so £9000 a year- to keep them there. they’ve forced our hand.

However - I’m excited to see what happens as 80% of parents in my kids school work to pay the school fees. After a survey the school have conducted 60% will leave. The council will have a lot of place finding to do or expense as the schools locally are full - I’m part of the admission board for this and they will need to pay ,as it’s above the 3 mile radius , to get a taxi for the children to get to school if they can’t get them into the local schools they live near.

Some of the boarders will be moving abroad as under the EU they can’t charge VAT so parents will board them abroad which they are happy to do . Other parents who work internationally anyway said they can relocate is it doesn’t make any odds. It seems the policy will mean some well skilled people will leave the UK and there money and tax now won’t be in our economy but elsewhere. The knock on effect to this policy is far wider that labour seem to have thought about.

Labour seem to think people who go to private schools are all incredibly wealthy. Majority are normal people using the schools for child care help to do their jobs. They are punishing normal middle class earners and making private schools for the elite.

Some private schools are looking at changing the school set up - where they take the government allocation for each child like state school and then charge extras for children (which is the equivalent of their fees) so they are better off as they are now getting their state school allowance and then on top have top up fees (similar to the nursery fee set. Up). I think this is fair so then they can shout about how they have added 20% VAT on to fees and taken away the charity status but behind the scenes the education budget will increase for taxpayers as every private school pupil is taking their state school allowance.

This is how I feel. A bit like fine- you win , we will put our children in state schools, I’ll stop working! I’m not that bothered- we didn’t put our children in for prestige which they make out we do, but rather practicality to both work! So I can now leave my job as a teacher and do drop offs and pick ups. Forces our hand but I’m not going to live by not being able to afford Food shopping etc To put them in the school they are currently in!

It's also interesting because a lot of parents at our school are very left/ liberal and sent the kids to independent because the schools in their village and towns are very very right wing, very white and don't support their ideas on gender policy (very rigid, he/she) and they didn't want to put their kids into schools like that. So labour are alienating their own voters in that instance

Labour seem to think people who go to private schools are all incredibly wealthy

The majority, but not all, have higher than average incomes.

Scaremongering much?

Maybe you should wait until there is a manifesto and then see what the parties are claiming that they will do.

Random articles from unknown sources that have mysteriously vanished aren't the most reliable of sources.

IF that is what happens (and schools may not push the whole cost on to parents) these are the most resourced families in the world. Literally the top 10% wealthiest. It’s all relative. Families on lower incomes are genuinely struggling to eat properly leading to poorer health incomes. If the richest and most resourced people in the world can’t adapt to this then it’s a sorry state if affairs.

If you can afford to fund something that you could get for free because you choose to, then you are better off than the vast majority of people in the world.

And therefore it follows they deserve to be taxed even more? But only better off people with children?

I dispute that they are the most resourced families in the World. Salaries are low in the UK for skilled professionals when compared with many other countries. I am employed by a U.S. company and my salary would be double in the US (plus I would pay less tax). Top ten percent can mean a salary from £60k. My state school teacher brother earns that. I will tell him he’s part of the most resourced in the World next time he goes on strike. That will go down well! The reality is that he would leave the UK to work in another country that pay their teachers much better if it wasn’t for the fact that he shares custody of his DC with his ex wife.