Restaurant Takings vs School VAT

[PollyG23]

Restaurant takings are down YTD and most commentators are saying that it is due to NICS and min wage but surely a big factor is due to the VAT on school fees which is eating into middle class discretionary spending- why is no one mentioning this? (Or maybe I just haven’t seen anything?) What else is getting eaten into? (No pun intended)

Personally I think it's because the food in restaurants has gone so far downhill in the last few years. Even quite expensive restaurants are serving the same old shite - nothing exciting or different from what you could cook at home. Mid-range and budget restaurants - you might as well buy a ready meal from Tesco.

Some people are so desperate to claim that schools should not pay vat (for some reason) they'll try and shoehorn anything in

Weather's not as nice, vat on schools
Traffic was heavy today, vat on schools

Actually, I hate to break this to you, but some of us are actually not two home owning DFL's. I am using inheritance to cover school fees, which are finite and when they are gone there is no more. We will have to take up places at state 6th form and now not have savings at all because the little amount that we did have left over, that would have paid for the last 2 years and support for a part of uni, is now going to be gone at end of Y11. Our choice sure, to keep kids in a school they are doing well at in the middle of GCSEs. Not many parents would pull theirs out at this time!

Personally yes we are eating out less because of the VAT implementation which is costing us £10k per annum extra of our post tax income. But also partly because meals out now feel very expensive for what you get.

Correct, but 20% of children go at some point (I.e A levels) so people could be saving now they need an extra 20%. Independent schools also support round 350 000 jobs which are now on shakey ground and the 14 billion the schools add to the economy each year is going to go down as more and more schools close. So it’s not actually such a daft question, I just think the brain drain and looming rise in employment resulting from Labour’s myriad of other taxes and ill thought out policies is more to blame.

Private schools already paid VAT, this is a new tax paid by children ( fee payer) aged between 5 and 19 on education services. Please familiarise yourself with the policies before commenting.

It's people on Ozempic and mounjaro eating much less.the restaurant trade is very concerned about it.

https://www.independent.co.uk/life-style/food-and-drink/features/ozempic-menus-restaurants-dining-habits-hospitality-industry-b2709332.html#:~:text=In%20the%20US%2C%20where%20Ozempic,course%20meals%20they%20once%20did.

This is interesting, I didn’t think usage was so wide spread.

All the people on weight loss injections... https://www.cnbc.com/2024/04/20/weight-loss-drug-patients-spend-less-on-restaurants-takeout-survey.html

Forgive me but I'm trying to understand what you're saying. You've got DCs doing GCSEs. Without the VAT you'd have had enough money to pay for them to complete their GCSEs, continue on to 6th form and still have some left over for university.

With the VAT the school fees have increased so massively that you've barely got enough to afford for them to finish their GCSEs with nothing left over.

Maybe I'm really rubbish at maths but I can't make that add up, unless the school is increasing its fees far in excess of 20%. Can you help me to understand the numbers involved here?

In our area of Wales restaurants are doing better at lunchtime than in the evenings which after the early crowd are very quiet. Perhaps COVID, perhaps Netflix, Prime etc. there's been a huge shift here.

It's not a tax paid by children. It's a tax paid by their parents, guardians, grandparents etc.

We eat out reasonably regularly (and don't have school-age dc), but when you are paying something like £17 each for a lasagne? I could make a lasagne for ten people for that.

We have plenty of money ( early retired boomers). We tend to eat out for breakfast , lunch or brunch. We eat out every week. I don't want to eat a huge meal in the evening anymore and it just isn't value for money.

The tax is applied to education services provided to children aged between 5 and 19 (for now), it is paid by who pays the fees which would generally not be the children.

Well our local pubs are rammed Sunday lunchtime…you have to book in advance a few weeks ahead ! I live in an area where many children are at private school!
I live in the South East,if that helps.

Interesting- where are you going @FairMindedMaiden? We are also considering leaving for this govt term. Both me +DP working at global companies so a transfer would be easy

Over £10pa extra - over 3 years, so £30k+ - doesn't leave enough for 2 years of the same at the end. HTH.

@PollyG23 We are moving to Canada, it’s 3-4 years and also through existing global employer. We’ve been considering it for some time and initially decided against it, but this last 6 months tipped us back the other way. When I read Phillipsons post around ‘our children’ we knew we made the right decision. House rented out from August 😬

This is an interesting point @mindutopia I hadn’t considered the increase in base metal commodity prices as impacting the restaurant trade but of course they do- durr!
Kwym about quality of food too!

amazing

I know lots of private school families doing this. It’s definitely affecting local businesses. The first things to be cut back are exactly what you say - eating out, lunches (some takeaway places in London charge £15-18 for a nice salad lunch), coffees, clothing etc. On top of that, families aren’t replacing cars. In reality, giving up any of these things isn’t exactly a hardship (driving into work in an older car and taking your lunch isn’t a hardship in any way). It’s an easy way to save a lot of money per month. Kids at our school often go to the local cafe for a hot chocolate/milkshake. The cost of that is now around £5. A lot are now only going once a week rather than 2-3 times per week. Again, it’s no real hardship. Whilst it’s no hardship to those families, it is affecting small business owners.

I would say that VAT on fees has definitely had an impact, but it’s not the only thing. Business rates, NIC and living wage changes has made things too expensive. With higher mortgages/bills, families are stretched enough. They can’t afford nice extras any more.

Really??? Could do better . Only 6% of dc are in private schools. Based on observation alone, the majority of people dining out regularly are probably too old to have school aged children anyway.

I did say for those already in the system. I think there’s another chat on the go about whether to start with private school education or not and this is where the real denting will come from (IMO) as people who may have entered will now not (maybe they’ll just prop up the restaurant industry instead 😉)

The cost of living has risen generally.
NICS and min wage also affect council wages and so council tax will have gone up, etc Utilitues have gone up, etc
People have less discretionary expenditure and are cutting back on non essentials such as eating out.
VAT on school fees may be a part of that but very few People send their children to private schools, so I personally believe it to be only a small part of why people are cutting back.
NICS and min wage will affect restaurant costs and some nay become inviable.