To be gleeful that most of us were right

[Wranglestar]

https://www.thelondoneconomic.com/news/adding-vat-to-private-school-fees-has-had-no-obvious-impact-on-state-sector-applications-390546/?fbclid=IwZXh0bgNhZW0CMTEAAR2ATdaVlNkJsbtC-KizuW4Fw41obnpvezxnFv4IAFwzJPHXmU90Awr5eqAaem9tMIsn9I0vHSC4jrdYONIA#0rd9makyd4264nstc4us9j77yk5kaoswtLondon Economic

And that private schools has had no impact on state school places. The rich have simply - paid more. Excellent news!

Any money raised from VAT isn’t being spent on defence. Originally it was going to spent on state education, but the government have now said that it’s going to fund new house building.

We have remortgaged to be able to pay our DS’ fees until the end of year 11 (he will goto state for sixth form). Unfortunately we couldn’t do it last year to be able to save on the VAT due to a big mortgage redemption penalty. We have got a small discount from the school for paying in advance. However, we had originally planned to use this remortgage money to extend and improve our house. It wasn’t spare cash sitting around.

We are not “all in this together”. The government have said that “hard working families” should be protected. However, their idea of who those families are is somewhat different from what many families think. They constantly bleat about “the broadest shoulders”. Many families have simply had enough of this and are choosing to move abroad.

Exactly. The government are simply looking at existing numbers in private school and are assuming that they are all paying VAT. Many aren't, because they have pre paid. What they need to be looking at is the decrease in the number of pupils starting at natural transition points. Many schools are now struggling for numbers. Lots of schools which used to be full now have plenty of space, especially in those years around reception/Y7.

Keir Starmer, Rachel Reeves and Bridget Phillipson are all state school parents. They definitely don’t have less money than me. They could afford to contribute to their DC’s (excellent) education costs. They have state funded houses, get rental income from renting out their family homes they don’t live in at the moment and have managed to get their own DC into outstanding free, state schools. Yet somehow it’s the private school parents that ‘aren’t paying their fair share’.

What the government forgets is that those 'with the broadest shoulders' have historically been paying more than their fair share for years. As was pointed out on another thread- a person earning £150k pays 15 times the amount of tax than someone on 30K. What they really mean is 'those who are unlikely to vote for us can get screwed over again because who cares'.

Mervyn King, former BoE Governor was just on Sky news talking about what the Chancellor should be doing. He was very clear that her current 'approach' has been scattergun, ineffective and lacks coherence.

@Another76543 I understand what it's like to work long hours and have less sense of reward. Our living standards have dropped because our household income went down due to redundancy and having to take a less well-paid job - the job market is awful.

As well as the mortgage going up, and wraparound care costs too. It's not great fun right now.

If VAT hadn't been levied, what other taxes would you have put up in its place? There's an online tool: Be the Chancellor | Institute for Fiscal Studies

The big reasons for us all feeling poor are the long hangover of the global financial crisis; Brexit; Covid; and international threat/the need to rearm.

The traditional left-right squabble of whether it's more moral to be an aspirational private sector type or a cooperative scruffy public sector type is trivial by comparison, because both pro-market and pro-state approaches would struggle given the scale of the challenges.

And yes, we are all in it together, even if you feel uniquely picked-on, which you aren't.

No, but you still have the option to raise money for fees and have decided to raise money AND spend it on fees.
you won’t get much sympathy from the people struggling to pay rent, heat their houses, have decent foods for their kids, get in the property ladder.
it’s still a position of privilege to be able to do what you’ve done. your money your choice of course. But it’s clear that many people can pay themselves their tax due on school feels even if they’d prefer not to .
Which goes back to OPs original post.

How much do you think the VAT on schools has raised?! 1p on income tax would be my preferred option. That would have actually raised a decent amount of money which could have been invested into state schools.

Where did I ask for sympathy?!! My DC is one of the lucky ones as we had the option to find the funds to keep him in his school. But there are many that haven’t been so lucky, hence 25,000 pupils being removed from their schools already. Anyone who supports the OP’s original post, who was gleeful about children’s lives being negatively inpacted, has a serious problem, you included. And for what it’s worth, I made my own privilege. Instead of being embittered about growing up in a low income family, with a dad who was in and out of work, I got off my arse and built a career.

Putting 1p on the basic rate of income tax and/or VAT would raise billions. The only reason the government don’t want to do it is because it’s not seen as politically popular.

I'm also not asking for sympathy. It was relatively easy for me to find the money to pay the extra VAT because, by chance, I had a child finishing school at the end of the school year they (vindictively) bought it in in the middle of so I have one less child at school.

My sympathy is going to my son's friend who lives in a one bedroom flat with his mum and 3 younger brothers who has had to leave the school and friendship he's been with since year 7 when he got a 75% bursary for fees, midway through A levels, where he was doing Maths, further Maths, Chemistry and Physics, because he is very clever and driven, to go to a state sixth form where he knows no one and they dont offer further Maths, because his mum can't manage the 25% plus VAT on her supermarket wages.

My sympathies also go to the SEN famillies that now have less choice in finding a suitable school place in difficult circumstances, and all the children who have been disrupted and upset when their parents couldn't absorb the VAT and keep them at their existing schools. Also, the teachers, catering staff, maintenance staff that have lost their jobs at little independent schools that have been forced to close.

They may have to increase income taxes anyway. But it's fairer to levy more progressive taxes first, no?

What's a progressive tax? Taxing some people and not others? taxing wealthier people first (but not the super wealthy I.e the Blairs et al)?

It would be fairer if they exempted anyone with a SEN diagnosis. State refuses to cater for my child, and yet the state penalises me for funding alternatives.

Oh yes, I’m utterly delighted to be watching my relative, who is a Dr, work herself to death to pay the increased fees so she can keep her child in the only school that meets his SEN requirements.

It would be fairer if they let both systems coexist together and give parents choice, like other consumers, and let the independent sector pick up some of the slack like it used to in terms of SEN provision, bursaries, free use of playing fields to replace the ones sold off in the state sector etc etc. Much like they are happy for the private HC system that all MPs benefit from to coexist and pick up the slack from the NHS they are failing to get a grip off in terms of testing, overflow beds and NHS operations to massage the waiting lists to look vaguely acceptable.

Any public sector workers on here in favour of VAT on private healthcare? No, didnt think so.

The word that springs to mind is: hypocrites.

This was our exact situation too.

The people making spiteful comments clearly have no idea how fortunate they are, if they have children, that the state schools their children attend are able to meet their needs.

Fewer. And no, it isn't, unless your view of a "win" is hurting children, to no benefit for a wider group of children.

I do understand how awful it is when the life you have worked for and plans for your children suddenly go awry. After a sudden redundancy, I had to pull my child (SEND child) out of a tuition centre. We couldn’t afford it and I felt like I’d let them down.

But I can see why the government chose to levy VAT on school fees. The tax system as a whole isn’t very progressive and the ship is having to turn given the scale of need.

A tax is progressive when rates increase with our ability to pay. Private school VAT is effectively progressive because it’s a voluntary expenditure and on average is chosen by the relatively richer.

A progressive tax isn't about taxing some people and not others. The core principle is that taxes are universal, though levied at different rates on different income bands/activities/assets in the interest of minimising economic pain while keeping the overall tax system as fair as possible.

The exemption wasn’t removed to punish anyone or shut schools down, but because it was increasingly unfair and anomalous. The no-frills tuition centre that my child went to was VAT-registered already, because it wasn’t exempt.

The country has to raise money to protect us all against major external threats and sort out infrastructure so the economy can start to pick up.

I really do feel sympathy for people whose plans have been up-ended. So many are struggling - people who can’t afford a second child gambling with their fertility by waiting until their first child is in school to try for another. People who can’t get any social care help, people hit by Universal Credit mistakes, people paying impossible rents with no other option, people on long NHS waiting lists.

Pretty much everyone is finding it tough right now - we're genuinely in it together.

So what about private HC and university fees? Also chosen by the relatively wealthy? Also 'unfair and anomalous (if by anomalous you mean 'not controlled by thr state') Should that be taxed too? Yes or No and if not why not and why isn't it being?

No, I think if we are all in this together then everyone can pay! The cash cows have had enough and we need the cash cows to keep this country running. I’m not a cash cow, by the way, but I can see the impact of pissing them off. The country is going to fall apart without them.

I don't know what private HC is, sorry!

The government already provides a lot of subsidy to universities. So if it removed their exemption, it would be under pressure to increase subsidy in response. IIRC they're proposing a new levy on international students in HE, so they are clearly trying to raise revenue where they can.

I meant 'anomalous' because the case for it being exempted isn't strong enough for it to be treated differently compared with other non-essential services - whether in terms of the economics of the exemption continuing, or in terms of public support for it.

The IFS published a report before this government was elected which is very useful. The conclusion:

we expect that the change in private school attendance levels will be small. This leads to surer increases in tax revenues and less need for increases in public spending. But it also means that the long-run effects on returns to education or inequalities will probably also be small. If the main aim of removing tax exemptions from private schools is to raise revenue, then this is likely to be achievable. If the aim is to encourage more pupils into the state sector and reduce inequalities by school attended, then this policy package is likely to have only minor impacts.

Tax, private school fees and state school spending | Institute for Fiscal Studies

I think you do but you dont want to answer. Private Health Care. What's the difference? Why isnt it going to be taxed as well? https://bbc.com/news/articles/c0knr2dmn4mo

Like I said, hypocrisy.

@sunbum "I think you do but you dont want to answer"

Sorry, I didn't recognise this at all 😄

I really have no idea, but my guess is that the economic case and public opinion case against removing the exemption must just be much stronger.

It's a whole different market service, with different implications for the public purse if that exemption were removed.