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?

I liken it to the policies about changing benefits. It is aimed at all those "the rich should pay more tax" members of the public, like "you shouldn't sit at home on your arse claiming benefits that us tax payers fund". It just feeds into the narrow views of general society because they know that people won't actually research what they are being told.

By that logic nursery and university fees should have VAT added too then?

Many people hypothesising ‘oh most will absorb it they won’t move their DC’ - as a private school parent I know this to be incorrect for many.

I know people with one in private and they won’t be sending the second because of this. I know many parents with Year 6/7 children who would have gone private for secondary but this has put them off. I know children whose parents who are going to remove them from private for secondary school now.

I wonder if our local private schools will continue to offer the local state schools free access to pools and lessons, cookery classes, use of the sports grounds and whatever other facilities they lack.

I think it will cost the government.

Not to mention those of us who moved our SEN children from state to private as they couldn’t cope, who may now have to chase an EHCP to counter the VAT.

I have thought that the amount of money that the Government will end up with is a lot less than it may think.
Based on my own business with a turnover of 200,000 the vat owed is 40,000 but you can claim back vat paid through the year so the vat bill averages £16,000 less than half.
They may have better accounts than me as well and the first year you can backdate it and so recipes will be less vat owed.
Add to that the costs of educating the students who leave and it certainly won’t be a cost benefit.
I didn’t send my children to private school and am just trying to be objective, I do wonder ifthe Labour front benchers are not very astute on finance though - do they know how much it will cost?

I was adamant I was going to vote against a shambolic and divided Conservative Party until Labour came out with this. It is a policy designed to have their core vote clapping like seals and is based on envy and class war principles that I had thought Keir Starmer had fought hard to rid the party of. If this is in the manifesto, what next?

The stupid thing is that it will only make private education more elitist. Your middle classes and aspirational parents who value educating their children ahead of expensive cars, bigger houses, designer labels and Dubai holidays will decide that they are squeezed enough to not consider private education while the generational wealthy will just shrug their shoulders and carry on regardless. Guess what? Your professionals, medium salaried workers will be pushed out. The twelfth Viscount of Beaufordshire or whatever will barely notice anything happened.

Absolutely well done Labour. I hope you lose.

@Everanewbie also recommend looking at the Labour website. They make a lot of claims about what they will achieve, all of which have no substance. It’s word salad.

I was going to vote for Labour despite this policy, as I think the Tories are seriously in need of a long time out. 10 years might work. Then I read that drivel.

We can suck up the VAT prospect for DD1. Whether she stays for 6th form is questionable. For DD2 I’m starting the fight for an EHCP already and will be trying to name a state school secondary to get the guarantee of a place.

I think this policy will make short term money, then cause the smaller, poorer schools to collapse. That damage will have a knock on effect for the economy. Labour will then see the problems at state magnified and will have no way to handle them (since apparently they gave promised not to raise any taxes at all). But hey, it plays well to the haters.

I wonder if our local private schools will continue to offer the local state schools free access to pools and lessons, cookery classes, use of the sports grounds and whatever other facilities they lack.

Presumably stuff they are doing to justify their charitable status, not from the goodness of their hearts.

Perhaps private schools should take a look at how state schools manage on so much less money per pupil

They don’t manage. There are endless media reports about how state schools are struggling with their budgets. In reality, a lot of money is wasted within the state system (eg multi layered management on large salaries), but I don’t think anyone would argue that state schools don’t need increased funding.

Does it matter why they do it?

But if it’s not there, it impacts people who use it. Whose children aren’t in private school.

It is already extremely elitist. If the 6% becomes 4% it makes no difference to the 94%.

And don't forget that those parents with DC in private schools almost all pay the highest rate of tax, thereby funding state school places that their DC don't use so, in effect, paying twice to educate their DC. If, in future, they take up places in state schools that money will no longer be available to educate the DC of parents who either don't pay tax or pay lower rates. It doesn't make an ounce of economic sense.

I don't really understand this logic - and I've seen it reiterated multiple times on these threads. My dc are at private but I don't see that as them freeing up a place in state I am paying for through my taxes. It is an odd argument because part of our social contract is we provide education to all our children so society continues to function and (one hopes) prosper. AFAIAC, the more we educate the better. I may have misunderstood but I find this particular argument very disingenuous.

I don't think the policy is about raising money at all. 6,500 new teachers amounts to 0.25 per school, that's not going to make much of an impact, that's without the kids who move from private to state, and it will be a lot more than Labour think. LA's are already reporting a huge number of private school parents enquiring about state school places from as soon as this September.

Labour (and many of their supporters) have a fundamental hatred of private schools, they want them all closed, regardless of the impact it has on the economy and the state sector. They believe they should be abolished at all costs and this is what it's really about, they will deal with the fall out because it's an ideological policy.

@Iscreamtea but if private schools have to make cutbacks due to fewer pupils, they might not have staff available to help supervise these visits. Will they be able to run their swimming pool, will they be selling off some of their playing fields so won't have spare grounds for other schools to use. This policy will have a negative impact on state education, there are no benefits from what I can see (and I don't have a child in private school and am involved with state education)

I agree with you. This is not about raising money but the politics of envy.

Well indeed, but then even if they absorb the VAT private schools will still have thousands of pounds more per pupil than state schools. We're not talking about making them have the same piss poor level of funding afforded to 94% of students.

The number of state schools that benefit from access to private school facilities is so miniscule I don't really think it is a huge consideration.

You’re confusing corporation tax and VAT. Businesses pay corporation tax on profits (including the many private schools which aren’t charities). The proposal is to change the VAT status. If you think that all “businesses” should charge VAT, what about private care homes, private nurseries, private hospitals etc? They don’t generally charge VAT.

@Lenoftheglen the issue is that school funding is based on per pupil. So if Parent A currently uses private school for their DC their tax paid doesn't have to pay for their DC to go to state school, so there is money in the tax fund that can be used for something else. If Parent A then switches to state school, but still paying the same amount of tax. More funds have to be spent for schools and will take that money from wherever it was being spent before.

Surely the sensible thing to do would be increase state school
funding.

This policy is surly going to impact grammar school intakes which knocks on to state school children. Parent who decide private is no longer an option will have the money to pay for tutors, live in the right area etc and still have an advantage over kids from less well off homes when it comes to grammar school application.

But also, People talk about the inequality between private and state. But there’s massive inequality in state schools. Every good school where I live has extortionate house prices. So it’s still only people who are better off can afford to live in the catchment.

No one seems to be massively concerned about that inequality.

I am really lucky. Ds has autism and we live in a fairly poor area that happens to have a good school, he is doing really well and they are really supportive of him. He is thriving. But that is incredibly rare. Primary was a nightmare for him and had a massive knock effect to our family life. While I can’t afford private school I would be devastated if I had ds settled in a private school that worked for him and his autisim (because that was the only choice at the time) and I had to remove him.

I don’t think it’s difficult to understand that. And given this is unlikely to raise much money or improve the education of disadvantaged kids I can’t see the point.

@Iscreamtea so why aren't we hearing about policies to help state schools, why is this the only policy we're hearing about, which isn't going to help funding in state schools. So Labour don't like private schools, so is their intention to bring all schools down to the level of state schools which are in crisis, surely it should be the other way round, to bring the levels up in state schools.

Tough if you can't afford the fees you move. People shouldn't stretch themselves so much, and should have a cushion.

They haven’t thought it through and it will end up costing more money. This will be eagerly exploited by the right wing press.

In their rush to continue culture wars, they’ve created an unnecessary own goal.

I do think that the policy could actually end up costing the taxpayer. The Labour Party don’t care about the economics though; the policy is one driven by spiteful ideology and a perceived vote winner.

The Labour Party are basing their figures on the IFS report which estimates a tax take of the equivalent of around 1% of the state education budget. However, the IFS calculations are full of flaws. For example, it accepts that some children will leave the state sector. However, it assumes that every penny saved by families not using the private sector will be spent on goods and services subject to 20% VAT. In reality that is not going to happen. If a family is saving money by not paying school fees, a large proportion of the money saved will be spent on foreign holidays, savings, pension contributions etc (none of which are subject to VAT and could cost the government money through tax relief due).

This policy will disincentivise strivers and household incomes of £50,000 to £150,000. That isn’t an elite, that’s medium to medium high incomes. The elite won’t blink an eyelid. It’s a policy designed to attack an elite when all it will do is sting those who prioritise education and remind middle earners that they are cash cows to Labour.