Doubts grow over Labour’s VAT plan for private schools

[Blanketyre]

Article in the Observer here:
https://www.theguardian.com/education/2024/oct/05/doubts-grow-over-labours-vat-plan-for-private-schools

I must say they've gone very quiet on it.

The title could not have been clearer. I don’t really understand how you could have clicked on it if you didn’t want to read a thread about Labour’s VAT plans.

Labour’s ridiculous policy will have a negative impact anyway, not due to the ‘bloody VAT’ though. That’s why they should accept it’s a dud and drop it.

They have with non dom, they can with this.

That makes no sense. Private school parents don’t exist in a microcosm of affluence. They access public and private services which are staffed mainly by state educated adults. Parents don’t pay directly for state education because it is not a service for them. It is for society. In a society without universal state education, everyone would be less well off.

Well many other countries offer tax incentives or if you send your child to indy because they recognise that it reduces the burden on the state.
A better idea would be the voucher system. The government allocates a voucher equal to the funding per state school place to every child of school age. As a parent you then spend that in a state school or you top it up to use independent. However I'm not sure that Labour want to spend an extra £4billion per year to cover the cost of educating nearly 600,000 kids

Well then is up to you that are using state system to make it better. You can afford to.

Not really. Then you'd need to give a tax break to anyone who doesn't have children at all - they aren't using state school. Maybe a little tax break for those who have private healthcare? And those who don't have an NHS dentist. And another extra tax break for those who don't have children because they've not used maternity services and they don't have children using the NHS. And then extra tax for those who have more children than average because they've used more NHS services and so do their children (but maybe you could subtract some of that if they went private for the birth).

That isn't how tax works. You don't pay less simply because you don't use a particular service. Or pay more because you have.

People are forced to stay until end of this academic year as it is a nightmare to changed in the middle of the year. They purposely brought the VAT to January 25 to make it look like there are not many kids moving. Also, places are not available so of course it looks like that. Nice try!

If the Labour Party were truly interested in improving education for all they would commit to putting substantial additional
funding into the system. They would address the situation with regard to SEND provision for those children with additional needs who attend state schools. They would ensure the right amount of funding to keep good experienced teachers teaching in state schools.
Whether or not you agree with the policy of adding VAT private school fees it does not currently guarantee any additional funding- which is desperately needed wherever the money comes from. In my view the policy was a cynical ploy but time will tell.

It would be such a relief if it were cancelled. We’re one of those families using private education for SEN reasons (but without an EHCP). 100% the right choice for our child… but when we applied for her (secondary) place in 2021, the fees were £13000 and now with large annual increases and the VAT we’re looking at nearly £19000 a year from January. We can’t really afford that but it would be devastating to her to take her out, so we’ll be struggling and going without even more (the fees will be over a third of our household income)

The irony us that she uses the astroturf pitch of an independent school to play her hockey on and Starmer is happy for his daughter to use facilities of local indy school to play hers. Hypocrites the both of them

The policy was designed to throw red meat at the left wing. Just like ‘stop the small boats’ nonsense parroted by the Tories. The supposed money this policy will raise has been spent at least twice and the figures have been called into question more than once. It is undoubtedly the politics of envy and in real terms will not affect the state system in any meaningful way. Independent and state schools have coexisted for many years and in more recent times the former have supported the latter for the benefit of the community. Withdrawing incentives has an enormous impact: less bursaries for deserving bright kids, less sharing of facilities and more pressure heaped onto an already broken state system - particularly where SEN is concerned.

It starts with taxing indie schools but the a very dangerous precedent is set. Visiting music teachers are confused as are other tuition types. Absolutely no reason after this goes ahead why Universities shouldn’t start charging VAT and the same with nurseries. And who wins then? It’s as if everyone has forgotten that once you charge VAT, you gain the ability to reclaim it on expenses you couldn’t claim against before…which is a no-brainier for institutions and businesses alike. It’s an illogical decision which has really not been thought out and eventually will affect the very people who can least afford it.

100 mid year applications in a week! Depending how full the school is will depend how many will get in. My school is significantly over subscribed but some schools obviously do have vacancies. That depends on location and popularity of the school. If our case almost all of those 100 children would have to go other schools. Some of them would probably be quite far away too.

All these threads ever prove, time and time again, is that nobody likes paying more tax. Which is not surprising. What they also explain is how unbelievably difficult it is to try and increase tax paid by the wealthiest in society.

People will always come up with reasons why it is inappropriate for their specific scenario, a proportion of which will of course be very valid.

90% of private school parents have an income in the top 10% of earnings in the UK. 85% are in the top 5%. This is simply an extra tax on those high earners who are choosing, for whatever reason, to use independent schools.

All the rest is just smoke and mirrors.

No, this policy is smoke and mirrors for Labour not properly funding state education. They asked DfE to make cuts of £1billion.
There are more wealthy parents in state schools than in Indy ones purely based on the law that 93% choose state education. They could offer to pay more, they can afford it. But they don't. Everyone can choose to pay voluntary contributions to HMRC, I don't see the champagne socialists of MN doing that

Yep

I am interested to know how Labour plan to fill the gigantic hole that is the funding crisis for state schools if they do not get the amount of money anticipated from VAT on school fees
I can’t see any mention of a plan B
I think they got votes on the back of a plan that had no guarantee of success and may now be about to let us know that it didn’t capture as much in additional funds as expected and given the “black hole” we’ll have to do without yet again- but he’ll be saying it in expensive (freebie) suits so we’re all good

The post below your explained it.

The sooner people realise the govt is trying to pit parents against each other the better. All the while not dealing with the real issues. If people think this cash grab will raise state schools then I don’t know what to say.

Well they told DfE to make cuts of £1billion. If only Labour had engaged with the Indy sector at all, or done any of their own analysis as IFS told them to do. We have been warning them of the logistics of this for 18 months now and they refuse to listen or engage. They are arrogant, spiteful and incompetent

Across the board, labour have lots of policies that sound good but are unfunded and not really thought through that well. Eg in health, they are saying a lot of the right things but not stumping up the cash to back that up. In education the free breakfast club for all is similar- will be logistically challenging and not clear how it will happen.

Vat on private schools is one of those. Rushing through complex policy is never a good idea because you can’t fully assess the impacts properly (which will be very different county by county) or really think about coherence. If growth is a core objective, this policy isn’t really consistent with that (fees are quite the motivation to continue working in higher paid jobs for longer).

Agree.

Will grab my popcorn in a few months and watch this all unfold. The sad thing is that all kids will be affected

Perfect example to prove my point. Cherry pick some figures, point out another group who could/should pay some more tax etc etc.

It still boills down to the same issue. Parents sending their children to private school don't want to pay more tax. We get it. I wouldn't want to be targeted either.

These policies are sound similar to Johnson’s NHS bus during Brexit - populist policies that appeal to the lowest unthinking denominator

Aa has been said many times, I don't object to paying more tax, I object to others NOT paying more tax.

Increase income tax and I really would care if it meant I paid the same increase - so long as other wealthy people put their hands in their pockets too.

I called it the Brecit bus policy throughout the election. Divisive and ill thought out

Actually I don't mind paying tax as long as everyone else does too. I especially object to people who are more wealthy than me virtue signalling by crowing that they choose state education for their child when they use their money to buy houses in the catchment of the best state schools etc.
If we really want to improve state education then EVERYONE has to pay more. Labour telling DfE to cut budgets by £1 billion doesn't signal that they want to invest in state education.