To ask if anyone is clued up on the challenge this week to VAT on school fees?

[feesss]

we went to look round a school this morning and we obviously asked about VAT and the lady showing us round said there has been a challenge this week so it may not happen? Is anyone aware of this? I can’t see much online about it?

https://www.scotsman.com/education/edinburgh-state-secondaries-inundated-with-applications-ahead-of-vat-private-school-fee-charge-4899477

I idly wonder how many private businesses schools are using the imposition of VAT as a cover to sneak a little extra % on top ?

They can't! If they invoice an amount for VAT then they have to pass that on to HMRC.

Lots from the sounds of it. And they seem to be hammering their customers too… passing on full VAT and hiking up fees despite the fact that they’ll be able to claim the tax that they have paid previously on capital projects like buildings and land acquisition once registered for VAT.

Private parents are being taken for mugs.

Any half self respecting business owner I know would use the imposition of 20% VAT on their net prices as an excuse to increase the net price by ... say 25% ? (Conservative I know). Bearing in mind the extra resources needed to manage the accounting now.

In fact now I come to think of it, 30% is probably more realistic.

Odfod
You are being deliberately goady

I did say "how many" as a question. "?". Suggesting I didn't believe it to be 100%, yet also not believing it to be zero.

Because I dare anyone here to tell me every single private school in the UK exists merely to educate and not to return a profit to it's investors. I double dare you.

https://www.gov.uk/guidance/charging-and-reclaiming-vat-on-goods-and-services-related-to-private-school-fees

“Activities of charities that run private schools
If a charity carries out a number of activities — including running a school — each activity must be considered separately to decide if it is a business activity and subject to VAT.
An activity is a business activity if it involves making supplies for a consideration with a view to generating income and will be chargeable to VAT. It is not necessary for the activity to make a profit.”

So renting out the local pool at cost will now attract VAT? For all of us using private schools for extracurricular activities. I hope Bridget Phillipson gets charged a penalty for playing hockey at the local private schools! 400% VAT just for her. It is not discrimination…

Absolutely idiotic policy.

“Nursery classes provided by private schools
Nursery classes that are wholly, or almost wholly, made up of children below compulsory school age remain exempt from VAT. For example, where 90% of the children in the class are below compulsory school age the class will be exempt from VAT.”

Here you go, more age discrimination.
A small prep with a mixed nursery and Reception class, many kids below 5 - what a mess!

This is a public forum. Moreover it's in AIBU which is the paradigm of robust discussion.

And life - and society - are mirrors. For every worried parent here, there will be a worried non-parent. Worried about their tax rises. Their benefit cuts. Their loss of services. Their waiting times.

Remember: we're all in this together.

It's not for you to say who can and cannot post.

“And life - and society - are mirrors. For every worried parent here, there will be a worried non-parent. Worried about their tax rises. Their benefit cuts. Their loss of services. Their waiting times.”

@SerendipityJane - you are missing the fact that this VAT on private schools is not going to make the tax payer money. Therefore, it is not really a tax and it is not proportionate. It is simple class discrimination and ableism.
The only defence Labour has is that it is a simple tax raising method - well it is not, kids are leaving and not joining private schools and the state has to fund their education.
So there won’t be more services etc.

Taxation is always a balance between raising funds for all and stifling growth. On all accounts now Labour have gotten things very very wrong. The current recruitment figures show that current graduates are graduating into one of the worst cycles ever and the NI has stifled business. They were handed a growing economy by Sunak (for all his other faults) and they have killed it.
Now all we can hope for is that the post Covid international wars come to an end so that they can somehow jump on that growth.

They aren’t charities, despite some of them being ‘charities’ to avoid taxes … so shareholders? No. But businesses , absolutely.
The likes of Brighton College aren’t expanding their brand into Singapore, Abu Dhabi, Vietnam etc because they really care about the education of Asian and Saudi kids…
it’s all about the money, baby. Having it, making it, protecting it, growing it.

And if you’re in any doubt of their intention, the ‘headteacher’ of Brighton College is now ‘Group CEO’ for the brand.

Brighton College et al are a small % of indy schools. The majority are not for profit.
FYI Academies are run as business hence they have CFOs etc at the expense of teaching staff.

https://register-of-charities.charitycommission.gov.uk/en/charity-search/-/charity-details/307061

Brighton College is probably expanding overseas via partnerships so that they can then fund bursaries in the UK? Most of the money they raise is spent on educating children. There are no “profits” as such, they are reinvested into the school. Every time a private school builds a new hockey pitch they actually employ local people to do so anyway. Private schools have more employees than state schools and those employees all pay tax. It may be a bit inefficient to employ so many people, but it is not for profit. Nobody is pocketing profits for themselves. If anyone objects to the salaries of the head teachers in private schools - they are not too different from state school groups anyway.

What’s the PS equivalent of a CFO?

Aren’t they usually called Bursars? Or in some cases Business Manager or Finance Manager?

@SabrinaThwaite - the staff including head in private schools with charitable status - all their salary information is on the site and freely available and taxable.
Are you accusing them of having private shareholding stakes in international schools that are run for profit? Is that a fact?

Most of the academic day private schools do not have shareholders. About 7% of their receipts go back out on teachers' salaries. They may well save some funds for later projects or for their later bills of other kinds but there is no one taking profits out. This is in every school where any of my children have ever been including North London Collegiate, Haberdashers, Merchant Taylors - day private schools with no shareholders.

However subject to the law the state can do as it likes and market forces will probably then prevail as to where parents send children.

Education used per se since about the 1300s in the UK (and of course across Europe) to be charitable even if the people you taught were rich or opera goers. Labour - Blair I think - changed charity law in about 2008 such that opera houses and schools could not rely on that any more - that education on its own was not the moral good, the charity. Instead you had to help the poor too which is why richer schools had to bring in more bursaries and not very well off private schools had to start doing more for the local community eg access to their grounds

The new measure on VAT is likely to mean schools have less money so they would be allowed to cut back on bursaries and have their public benefit as something much lesser as they are allowed to cut their cloth according to their resources.

the VAT imposition is pretty nasty - it tends to be parents who are reasonably well off but not in any sense millionaires eg doctors and teachers etc who choose to pay for school fees perhaps rather than something else they might buy like a new car or bigger house. They are putting their child first over their own drug or handbag habit or whatever. Whilst I appreciate the argument that 20% of parents at sixth form level who pay school fees are lucky to have the money to fund that and the other 80% may not have the money or politically feel they want to support the local sink comprehensive by throwing their child into it for the good of the socialist cause, it does seem to be a very nasty tax to impose on what is often not particularly a luxury expense. Eg in NE England where I am from grammar schools were abolished in about 1970. My parents who had been to state grammars and became a teacher and a doctor (NHS consultant) paid private school fees for us. There was then and now no grammar school option. It is completely different in richer areas of the country like London and Cheshire where choice abounds. if state school were the same everywhere in the whole UK, Edinburgh, N Ireland, Newcastle, Kent with the same identical schools in the state system fine but that is not so.

Quick Google proves Brighton College does not have a large endowment fund like some of the other old public schools (eg. Eton, Winchester etc) So one means of raising funds for charitable purposes in the UK will be via international school partnerships. I really cannot see how that is wrong in any shape or form!!