VAT on school fees not applied retroactively- ultra wealthy are safe

[Kitkat189]

VAT on school fees won’t be applied retroactively to school fees paid before 29 July meaning if you paid your child’s entire education upfront, you escape the 20% increase. I know people who did this in the hopes that this would happen and now it has. TELL ME HOW THIS IS FAIR??? The ultra wealthy won’t be impacted by this at all while other families are going to have to move their children. To those of you who support VAT on school fees, please know that it won’t apply to everyone and that some of the revenues from this will be lost. If you think it won’t matter because very few will have prepaid, you should disagree with this on principle.

regardless of where you stand on the topic of VAT on school fees, I think we can agree this is fundamentally unfair.

Some well known schools refused to allow parents to pay up front.

no school would do that

simply not in their interests to do that

Our school positively banned parents from paying in advance purely on basis that it wouldn’t make a difference.
its a very well est school so im not sure this is correct

@Imaginaryhairstyle they’ll inherit a lot less than you think once Reeves announces her planned changes to inheritance tax.

This is standard practice for all tax changes. Would be the same if you put in a big order for spirits before excise duty went up but which was delivered afterwards. Nothing out the ordinary at all.

You’d think so, but Dan Neidle says that he received reports of schools doing just that.

We said that paying several years’ fees in advance would in principle avoid any later VAT change, because VAT would be charged at the point an early payment is made. We added that we doubted many people would want to do this – but it turns out we were wrong.

We have now received numerous reports of schools promoting the scheme.

taxpolicy.org.uk/2024/05/09/private_school_vat_risk/

So if they bought in vat on childrens clothes, you'd be happy to pay that for say, 2 years retrospectively?
No, nor should you. There is always a start and cut-off point.
But hey, the old people are losing their winter allowance, so swings and roundabouts...

I suspect some of those who would have paid upfront may well have already done so before the scheme was even a thing. As it was still incentivised before the scheme in some schools.

I agree that taxing the ultra wealthy is important and I don't think Labour are going far enough but they have to start somewhere because right now they are just trying to raise some cash. I think inheritance tax will be the next thing.

Not true. My cousin paid all 5 years at Radley in one hit back in 2015 and did the same for his second son 2 years ago. He has 3 years to go. They give you a price with estimated fee rises built in, less a tiny discount for early payment, and that’s it no more discussion about fees.
it is not uncommon. Grandparents do it a lot for their grandchildren.

Well I don't agree with the VAT, I think at worse it will backfire and, at best, have little effect but I haven't attempted to pay anything in advance as I recognise my good luck in life and would ultimately love nothing better than all children to receive an excellent education.
But what do you think you are going to gain by having a tantrum. This sounds like sour grapes because you're not as well off as others. I'm sure you're just thinking of 'me, me, me'.

That scheme has existed for decades btw. I remember being sent a leaflet about it in around 2010.

Those who privately educate their kids save the state money by not taking up their state places.

If you want things to be totally fair, they should get a rebate.

Calling them ultra rich in attempt to stir up the politics of envy makes you look pathetic.

Loads of normal families work fucking hard to give their kids the best start they can.

It's not for everyone. However everyone chooses different spending priorities. Stop trying to take away other people's choices because you are jealous

My Dad died recently and before he died he paid into a fees in advance scheme to cover years 8-11 for DS. Thankfully DS school is financially very well off.
if this is true it’s great news for us!

No one is taking away your choices. You can still pay for private school. It’s just that the fees will be a bit more now, so you may have to work harder, save more, and review priorities. Just like you did when you planned private school in the first place.

Our school along with many others all received advice from a KC about this. The school permitted early payment for a maximum of one years fees but payment had to be made before the election.

@Imaginaryhairstyle I’m
assuming your state comprehensive is a good one? Perhaps you chose your catchment area carefully when buying? I’m assuming it’s not in special measures?

I paid full up front school fees yesterday 😂😂 I honestly CANNOT believe I got this lucky!! Probably saved £40k over the next 6 years.

Utterly ridiculous post. These are tedious now.

if you’re ultra wealthy 20% increase is nothing. No need to pay upfront.

Already clear there can be offset, so schools don’t need to pass on the 20% albeit some are choosing to.

there’s been lots of recent fee increases, anyone who went into private schooling without anticipating a 50% rise given pension/inflation really didn’t think straight.

Let’s hope we see the standard of state education rising for all.

But their choice isn't being taken away. Private schools still exist, They just need to adjust their spending priorities a bit further now the price is higher.

Same here.
Our school did the same and almost everyone I know prepaid.

Oh, here we go again.

People who could pay up front have always got a better deal than anyone else. Schools offer significant discounts to parents who pay advance fees.

Nobody wants to hear your sob stories any more - you're lucky to be able to afford private school in the first place.

Most people I know also put it on cash back credit cards and effectively got a further discount..,

Please could you tell me what the actual status of this document is? I mean legally? Doesn’t it have to go through Parliament first?

Yep - that's what we were told too. The only people who'll benefit are those who can afford to pay all the fees upfront, and are in schools where they've always had the opportunity to do that.

That's just wise financial use of a credit card