More than private school fees will be affected by VAT

[MyNameIsFine]

Don't actually know if I'm being unreasonable here, interested to know whether this is true or not. Will the VAT on education also affect holiday clubs and afterschool clubs?

The Tory party are always on MN stirring things up about VAT.
it won’t work - Labour are going to win. VAT on private schools is going to happen. It really won’t affect many people in the scheme of things so I don’t understand the fuss.
It’s just Tory HQ employees and the number of posts about it is getting boring now.

No Tory here. Lifelong Labour voter 😄
Calling anyone a Tory who dares to disagree with a Labour policy is ridiculous.

Quite. “But it’s only £69 a week”. Yes, that’s £7k a year for 2 children. Hardly loose change for most people.

My DC’s nursery has said it will have to add the VAT as it is a charity, and my only other alternative (until I can get the funding) is a private school nursery who have said they probably will have a space due to existing children having to leave if the VAT gets added so I’m screwed either way. One DC goes to a music teacher who works at a private school and uses the music room and he’s said his fees will have to go up too.
It worries me so much because once they tax education how long till universities are hit?

@MyNameIsFine

The reason you break it down to make it look smaller is because most people don't operate on yearly basis budgets, they do so weekly and monthly, even private school parents. Its also a really good way of breaking down the argument about the cost, you are going to argue of an extra 69 pounds a week when you already pay 350?

However you hit the nail exactly here: "If you've spent £18000 on your mortgage, for an extra £68 to appear each week, you have to cut out something else."

If you where honest with yourself you'd admit that someone who is already spending 18,000 a year will have enough flex in their budget to find 69 pounds a week. If not then they were massively over stretched and it wasn't financially feasible in the first place.

I’m not sure your nursery understands the policy. Nor does the music teacher unless he’s doing spectacularly well!

And this argument keeps popping up as well. Most people will have some flex in their budget - which is all used up now by the VAT, so if something happens they'll be really vulnerable.

People keep complaining about the number of threads on here, but the refusal to accept that 20% is a very significant amount is the reason pp keep knocking their head against this brick wall.

I agree about the nursery, as it’s nothing to do with charitable status, but the music teacher might have a point. Schools will be looking at ways to mitigate the impact for parents, so may well start increasing their income from things like letting out music rooms.

The IFS figures are predictions of people leaving private school due to the VAT, not for other reasons such as price increases that have already happened and other costs going up. People who have already withdrawn their kids is likely due to mortgage costs going up and lots of schools already increased fees by up to 20%.

With regard to your figures, to get a secondary place for 2024 you had to apply in October 2023, which is before the election was announced. So again, the changes are due to other factors and not the Vat changes.

Obviously these other cost increases are entirely due to bad management by the Tories so a not a reason to avoid voting Labour.

It’s got nothing to do with when the election was announced. The threat of VAT has been there for a while. I know numerous people who, even last year, decided to switch at 11 because of the threat of VAT for 7 years of secondary education.

@MyNameIsFine

Come on, be honest. Anyone who was already paying 18k a year is not going to be overstretched by 69 pounds a week! They aren't going to be left vulnerable and again, if they are, they couldn't afford private school in the first place.

The % of parents that this could out into penury is probably ( to use the UCL study phrase) close to 0%.

People arguing against it would like to make it about cost, but it isn't really that they can't afford it, it's that they don't want to pay it.

Someone paying £18k per child may well struggle to find the extra £7k a year for VAT for two children, on top of the cost of living increases.

@Another76543

So you are saying that someone who has 36k ( more than the median household disposable income) to spend on just schools fees is going to struggle to find 138 pounds a week?

Come on..

I don't know. If it's through a private school perhaps they would have to add VAT to everything they charge, or maybe it would only apply to the main fees. Do private schools charge separately for educational trips during the school day? I would have thought they would include them, as they often seem to include meals, wraparound care, sports clubs etc?

Well, they might do. Because a lot of people aren't paying it out of their disposable income. It's disposable income + savings and/or + help from relatives.

@MyNameIsFine

Over 90% of children who attend private school come from households in the top income decile. They'll be able to find it.

Even then, most who are using savings/family help, will find this from somewhere. The numbers leaving will be infinitesimally small.

Stick to the same units, please. £18000 per annum. £3588 per annum.

Or: £346 per week. £69 a week.

Much clearer.

Due to possible introduction of vat that may or may not be introduced any time soon and may or may not actually be passed on by the school, and not due to any of the other cost increases that amounted to a greater sum of money and had actually already happened? Again, I think you are attributing the change to the wrong cause here.

Do I think that someone who might already be making sacrifices to pay £36k could struggle to find another £7k on top of huge increases in their general cost of living? Yes. There will certainly be families in that position.

The likelihood is that VAT will be introduced in the near future. Many families knew they couldn’t afford it so took a decision to move their child at 11 rather than part way through secondary.

@Another76543

I think its laughable that you think that there will be many, if any, families who currently spend 700 a week on schooling who won't find another 138.

There will be a tiny amount, but they won't negligibly impact the tax take, in fact as stated by the IFS they will spend the extra saved on consumption and pay tax that way instead.

"Many families knew they couldn’t afford it so took a decision to move their child at 11 rather than part way through secondary."

Or as is more likely, people have faced a cost of living crisis and couldn't afford the fees anyway.

Many families at private school will think that £7k is a lot of money, even if you don’t. Assuming they’re paying 40% income tax, that’s extra gross income of around £12k to find, on top of all their other expenses. £12k earnings might not be a lot to you, but for many families it is.

combination of the two. There's a tipping point somewhere.

Exactly. It’s the tipping point. Everyone has a finite amount of funds and will have different tipping points.