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.

We do not care about it so scroll past if you do not like it. No one has to be walking eggs shells to not offend the ones perennially offending us.

Nope. I hope as many of the private school fee payers avoid as much VAT as possible though advance payments or any other schemes that schools can come up.

People already paying for state education that they use less of overall (depending on age that child started private school) through their taxes, I don’t agree with hitting them even harder through VAT and good luck to everyone that avoids it.

If you pay for years in advance, what happens if things change? The head could change and the new one is horrific, the bursar could embezzle all the money, you need to relocate for some reason, the school goes bust…

That’s what came to my mind.

You have completely misunderstood this. The document clearly says that hmrc will challenge fees in advance schemes. The pre paid amounts are not guaranteed to be exempt at all.

Indeed that did happen in a school near me. Right down to the dodgy bursar...

Yes it's true that the people who suffer from this envy-based pretend politicking is the least wealthy at the school. They're usually either the people with SEN kids or the ones who have absolutely scraped to send their kids there. It won't touch the actually wealthy people.

Also, when those people I mentioned take the best state school places, there will be a whole tranche of 'not quite rich enough to be near enough to the good school' kids who go to a less good school as well. So in both cases, the least privileged will miss out (even if they are still more privileged than average overall. Just a lot of silly nonsense.

The reason for the classes of 67 in this article has nothing to do with birth rates.

They were caused by the Tories cutting council budgets by 50%. It even says that in
The article. Massively underfunded schools results in much bigger class sizes.

We paid for the coming academic year in one go, sometime before the election as our dd1's prep mentioned that it was an option. Usually we pay per term. But we wouldn't have paid for several years ahead - you never know if the school might close, or dd1 may encounter difficulties and want to leave. We've saved a bit of money for this year, but not much compared to 11 more years of fees (with VAT) for dd1 and 15 years for dd2.
We are well off, but certainly not ultra rich - no private jets, yachts or offshore wealth here!

Although my children go to private school I think VAT is a good and fair idea. It may even the playing field longer term and will definitely increase tax receipts at a time when this is badly needed.
However, I do find it very annoying that the VAT increase will come in mid year, after I budgeted for the 2024/2025 school year.
Had I known I’d be paying 20% extra from January I would have given our school notice we were switching to state school in March when I could do this without paying a term of penalty feed. I know many parents in the same situation who did not want to give notice in March when it was unclear if and when the policy would he implemented.
It should have been more predictable to allow households to plan for their yearly outgoings and give schools notice before it’s too late, as most parents sending children to private school would have had to give notice by Easter 2024 for fall 2024 to avoid paying a full term’s notice. Switching mid year is disruptive for children, for the school they are leaving and also for the destination school).
I suppose it’s a good problem to have but that’s still a shortcoming of the policy that could have been avoided.

They're usually either the people with SEN kids or the ones who have absolutely scraped to send their kids there.

See, this is just rubbish imo. The vast majority of private school parents are those for whom school fees are a drop in the ocean.

Most children with significant SEN attending an independent SEN school will be funded by the council - that's usually a condition of getting a place at all.

There are some children with much more subtle needs (not subtle to them but to overworked teachers) who simply thrive better in small classes at the moment, especially because the Tories have destroyed inclusion by taking away all the money.

This would be me and one of my children. But my point is that to say that people like my dd make up significant numbers in private schools is just bollocks I'm afraid and is a convenient way for you to victimise private school parents. Even though I'm one of those people, I'm still genuine enough to know that I'm in the minority.

A lot of private schools won't even let 'quirky' children do a taster day.

I can see your point.

At selective schools the kids that score highest academically or end up at the Olympics ARE the quirky ones. They just have smaller class sizes &
more teachers so the problems are managable.

DS & DN both have undiagnosed ADHD and both struggle with impulsivity but DS’ private school has smaller class sizes (15), daily PE, and two teachers per class so DS is thriving. DN is in a class of 60 (mixed year group), 2 teachers, 4 ta’s, 2 SEN assistants but DN still has spent more time outside than inside the class for asking unrelated questions.

At selective schools the kids that score highest academically or end up at the Olympics ARE the quirky ones.

It entirely depends on the school but the quirky bright children usually suit grammars more if anything.

Private schools often have no patience or inclination to accommodate emotional and social differences, no matter how academically able the child is.

Although care enough to comment on every thread that you don't care. Just don't read them / comment if you are so bored of them. You don't have a right to shut down people wishing to discuss this anymore than I have a right to shut down / try to moan into submission people wanting to talk about dogs.

I don't agree that it's fundamentally unfair.

I think passing laws that take effect in the past would be far, far more unfair on a much deeper principle.

HMRC will also now scrutinize prepayment schemes to check that they do legally qualify, which is exactly as it should be.

I'm not militant in either direction on school VAT, but this is one reason I'm dubious about it. Private schools remain, the very richest are unaffected, and the schools get even more socially exclusive.

If that was correct there would have been no need to put the date of 29th July into the drafting. It’s deliberate. Thus it qualifies the rule. Payments made after 29th July relating to fees for January onwards are vatable.
Challenge to pre paid schemes may well be successful if people have paid the whole thing up front where that wasn’t an option previously. However many schools did allow this.

our school and the others that all sought legal advice together were told to permit a year only.

See, this is just rubbish imo. The vast majority of private school parents are those for whom school fees are a drop in the ocean

this simply isn’t true. There are some super wealthy but there won’t be that many for whom school fees are a “drop in the ocean”.
Our school fees for two children required circa £85k of pre tax income each year (obviously half that if you only have one) For most families that is a significant financial commitment which requires sacrifices in other areas. At our school there are a few very rich families (maybe one or two max in each year group). The rest are mainly families where there are two doctor parents.

The drop on the ocean stuff is pure propaganda to stir up support for trying to reform the sector.

Do you feel the same about people who rushed through house purchases just before increased to stamp duty to save the tax money?

Honestly 20% VAT will have zilch impact on the ultra - wealthy millionaires.

It is a massive blow to families who have two working parents who are making sacrifices to pay for private education. Yes they may earn more than you but the government has now removed their education choice, some may consider overseas private education.

For those on salaries north of £150k - don’t worry as UK private will become more elitist

Nothing about private education is fair.
Whingeing because you are only moderately well off will go down like a sausage roll in a mosque.
It helps older parents or grandparents who are funding education from a fixed pot. They often pay upfront to avoid year on year increases anyway (then squawked in lockdown when fees for other parents were reduced).
Most of us pay on a termly basis but know we are very fortunate to be able to do so.

wow that is er…. noble of you @AhaHa

to be supportive of VAT to fees
and ALSO
having to remove your children from their private schools because you can’t afford the VAT being added to their fees!

It's incredibly unfair that richer people can buy advantages that simply wouldn't be available to those who don't have the money, isn't it?

Are there any other injustices in our society that you're concerned about, OP? Or just this one?

Sounds like good wealth planning to me

This 100%

As a primary school teacher - I could earn more in the private sector BUT it goes against my values and beliefs about education.
The crazy thing is (and someone posted a thread on this recently) that many ‘teachers’ in the private sector don’t actually have teaching qualifications!!!

Obviously it wouldn’t apply retrospectively but schools who have allowed parents to pay for the whole 7yrs of secondary / sixth form should be investigated as this is clearly to dodge the VAT. No parent would pay upfront when interest rates are high so any schools who have done this should be made to show that this isn’t a recent scheme and some parents have always paid 7yrs upfront! You do find it’s always the rich (and not always just the ultra rich) who come up smelling of roses.

I’m trying recently to repeat to myself over and over that comparison is the theft of joy and watching the news yesterday, realise that there are bigger things to worry about other than how much money some people have compared to myself.