If Labour win... are your DCs coming out of Private Education?

[MrsJamesMathews]

Sitting here doing some maths.

It's not looking great.

With increased corporation tax and VAT on school fees, I think we'll be having some very awkward conversations with our DCs schools on Friday.

Anyone else worried?

www.gov.uk/vat-builders/other-buildings Point 5 here - Vat not chargeable on quite a few buildings that might be relevant for schools

New builds are VAT exempt.

Restoring building that have been uninhabited for more than 2 years have reduced VAT if you use a VAT registered contractor (if not VAT registered the contractor can't reclaim the VAT on the things you buy for the building work but you won't pay VAT on his/her labour)

General restoration work and house improvements incur full VAT. Assuming that, because school projects are usually substantial, they are using a VAT registered contractor.

I am not keen on the independent school sector's arms race to update their facilities. It all needs to be funded (largely through fees) and I doubt that much of it is necessary to have an excellent learning experience. I also think there is a time bomb on the sustainability of this way of running these schools, as a substantial proportion of fees are already paid by grandparents, current parents are less likely to be in a position to pay their grandchildren's fees and, if they are, the chances are that help with a house will be a priority. It is possible that the ones that can attract enough international money will continue to thrive, while the smaller local independent schools will cease to be financially viable. So time may do Corbyn's job for him.

Thanks Jackie- you mean the charitable purposes point? It's not all new building that is VAT exempt is it? I guess if they remove charitable status it will deal with that issue!

Yes I agree on the building Genevieva, though in both of my children's schools it is about increasing capacity primarily (plus a sports centre...). The senior schools here do seem to be in a bit of a science centre arms race.

New buildings
Buildings used for Charitable purposes
Boarding accommodation
Are all zero rated

But in areas outside the SE there are couples on 30k or less each making the choice to live on one wage and pay school fees with the other. So as a family they survive on 30k whilst the other salary of say, 25k pays 2 sets of fees.

That's not to say everyone could or indeed should do this but there are more people doing this that you'd expect especially but not exclusively in cases where one or both children have SN and were being failed by the state sector.

The two main ways that projects are funded are through increasing the number of pupils and increasing the fees. So it becomes a never ending cycle. There was probably an earlier project that necessitated more pupils, so then the existing sports facilities don't offer sufficient capacity and need replacing / expanding. And so on. A lot of schools have newer facilities that universities now. It is a touch ridiculous given that the children leave when they are 18. But it is always the more modest ones with lower fees that close for financial reasons. I have come to the conclusion that people and magpies have a lot in common when it comes to shiny new things.

I'm not qualified to have an opinion of my own, but contrary to what @prh47bridge said, here are two opinions that, indeed, VAT on private school fees can't happen until we leave the EU.

www.blickrothenberg.com/BR-News/News/Adding-VAT-to-private-school-fees-would-only-possi

know-tax.com/some-brief-notes-on-imposing-vat-on-private-school-fees

Picky tax point, but there is a difference between VAT exempt and zero rated for VAT. None of you are likely to care, but certain types of building are zero rated, not exempt from VAT. All others are standard rated. (I feel so much better having got that off my chest).

The VAT specialists who deal with such matters are amongst the ones that don't give a monkey's about potential VAT changes, as they can charge in the region of £750 per hour for their work.

" "people who insist that they are going to flounce overseas "if Trump wins/if we leave the EU/if Labour raises my private education expenses" etc. etc. are usually talking bollocks."

Source for this piece of wisdom please Stickerrocks? Or is it just personal conjecture?"

My quote. Yes, of course it is personal conjecture--and one does not usually quote "sources" for things that are merely a hunch.

OK, "flounce" is a bit unkind. But having watched God knows how many people saying that they will leave the UK (or America) if XYZ happens, and then seeing how few of them actually do.... For what it is worth, I am a long-term/permanent expatriate Briton, and I would be the first person to emphasize that this kind of life has lots of disadvantages and risks, both long term and short term. It's not something you'd do because of being cross about a Corbyn government, and I say that as someone who can't stand the man. Makes more sense to stay in the UK and work things out while waiting for a change of administration/policy.

International schools have their issues, quite honestly. I think a lot of them have quite low academic standards and exorbitant fees, for a number of reasons.

It's all academic anyway, as TM will still be PM at the end of this week.

So true sticker - bloody tax lawyers always win (wish I'd been smarter and done that)

"One of friends at DS's independent school - parents each earn below average UK salary, c. £22k. As their household income is below £50K they are eligible for a bursary help for about 2/3 of school fees, but it won't take much to make the £5K a year they pay unaffordable under Labour..."

Is this a poor, unsupported child who was failing in the state sector?

I think not, or no bursary would have been forthcoming.

Or is this a high achieving child with loving, fully involved parents?

In which case they will generally be fine in the state sector, so I'm not wasting any of my tears for them.

There is something deeply wrong with a private education system which uses its charitable tax status to extend its largesse EXCLUSIVELY to well supported children who are already achieving at a high level.

The day private schools use their charitable status to support the education of low achieving children from neglectful families will be a long time coming.

mini
It sounds like the child is very clever then, to attract such a bursary.
What makes you think the child would suit a state school, they don't suit many tbh and with funding being cut, not an attractive position.
There's no way my dd would attend a state school, even if her funding is stopped.
We'd just go back to H.ed, the schools round here are dire, poor teachers can only fire fight and my child deserves better than this.

Please show me a private school which would give a substantial bursary to a child who had been let down by the state sector to such an extent that their state school couldn't cope with them. Private schools will only take difficult children if they their parents are able to at for the privilege or if they are exceptionally talented.

What makes you think the child would suit a state school, they don't suit many tbh What a generalisation. Unfortunately you only hear about the children they don't suit, not the 100,000s of successful, nice, well-educated children who thrive within their schools.

Not sure what happened to my 2nd sentence. It should have read:

Private schools will only take difficult children if their parents are able to pay for the privilege or if they are exceptionally talented.

Stick
I'm not saying they aren't nice children, but unfortunately my experience of state schools with our children wasn't good. Personally, I wouldn't use them myself.
I'm sure some do thrive in state school, however, if it was the majority there wouldn't be the angst against funding being reduced and teachers leaving in droves.We'd all be happy about a perfect state education.
It's not suitable for the masses, it's little more than baby sitting, I feel sorry for the teachers who try hard and just want to be able to teach. I would certainly never blame them for the state of the system.

I think this policy is wrong as children going private are saving the state sector money so to then charge even more is wrong and will be expensive if many decide to return to the state sector. I am not a conservative supporter and don't have children in private school. Also, I don't agree with children being forced to move from a school they are happy in. It is very disruptive for any child.

I fully appreciate that you had a bad experience yourself, but within my immediate circle we have a professor, a top manager within the public sector, chartered accountant, lawyer, one with more degrees from Oxford, Cambridge & Durham than you could shake a stick at, exceptionally highly paid consultants...I'm the only one with a hint of private education. I've been with 14 trainee accountants this week - none had a private education or an ASBO, they were all perfectly nice, presentable, articulate people.

Of course we are concerned about the lack of funding within the state sector, as we can see arts & languages being eliminated from the syllabus, more reliance on supply teachers and pleas for parent funding for basic supplies. However, you are very wrong to say that state schools fail the majority. In my own experience at private school, we had just as many issues with drugs and bullying as the rest of society. Most people go to state schools and emerge as fully formed, nice human beings.

That's not to say everyone could or indeed should do this but there are more people doing this that you'd expect especially but not exclusively in cases where one or both children have SN and were being failed by the state sector

Yep, lots with SN in the private sector including dd2 who was failed by three state schools.

Can you tell me how many of those state educated people went to grammars sticker?

"What makes you think the child would suit a state school"

The majority of children at the best universities in the U.K. have attended state schools, so it's clear that very clever, well supported children, can do extremely well in the state sector.

I'm sure some do thrive in state school, however, if it was the majority there wouldn't be the angst against funding being reduced and teachers leaving in droves. But isn't this exactly what you are doing? If private schools cannot afford to raise their fees by up to 20% to cover the potential VAT increase, funding will effectively be reduced within the private sector as well and you will also be upset about the cuts they face. The difference will be that your children may be in a class of 20 instead of a class or 15 or they may have fewer modern languages to choose from when they take their iGCSEs.

Not a single one, as we do not have grammars in Hampshire, Cornwall or on the Isle of Wight, like most of the country.

The three 18 year olds of my acquaintance who are at Oxford or Cambridge (to do music, physics and law) all got in from non-selective state schools.

I know it comes as a shock to some privately educating parents but comprehensives can actually turn out some super high achieving kids.

I appreciate I'd find that hard to accept if my own child didn't have the resilience or intellect to cope in an environment where they have to compete on equal terms with the majority.

None of us had tutoring either, although one makes a great living tutoring the kids who go to private schools or grammars but are at risk of not getting the straight A*s their parents think they deserve.

surprising - i went to grammar school in Kent, lots of excellent grammar schools there and a fantastic free education.

I would still gamble that not many of them went to anything other than top performing schools if I had a list, as well as investigating parental input, tutoring etc.