Is anyone else worried about the effect of rising private school fees on state schools?

[BabyIcecream]

Where I live there already aren't enough school places. Three big state secondary's, one is catholic, they are all over subscribed and bursting at the seams using old buildings with not enough funding.

Ive seen reports that at some private schools upto a third of pupils might leave if the fees go up due to VAT.

I'm worried about all these extra pupils needing places, DS already finds his school overcrowded and whilst I don't agree with private education putting extra pupils into the state system is just going to further disadvantage our children.

Unless money raised by increasing private schools costs is going to be used to fund state education? Does anyone know?

Bridget Phillipson was asked about the VAT issue in the webinar that's just gone up (around 14:30 onwards). She said that they are using the IFS report as 'the basis' for their work. It did sound as if they haven't done any of their own work on this. That is quite worrying given that: (a) any changes will need to be very carefully drafted and tested; and (b) they want to put it in as soon as possible.

I apprecitate it's probably difficult to get to the detail of policy without the civil service and resources of government. In that case they should commit to formulating the policy as soon as they can in office, not implementing it as soon as possible.

https://www.mumsnet.com/news/mumsnet-founder-justine-roberts-puts-users-questions-to-shadow-education-secretary-bridget-phillipson

@Mia85 what a surprise that they haven't even looked into this in detail even though they have announced it as a flagship policy 🙄
I can't even listen to the interview as I think it will just wind me up.

@stillavid That's also my plan. Leave DD at her school until Yr 11 and then remove her. I also plan now to move to a catchment of a good school as the local ones are not good.

You don't pay road tax because you are not wearing out the roads or polluting the air with a car. What a ridiculous analogy

The main reason we went private over the excellent state school was lack of wraparound care. We simply both would not be able to work full time with the state option and I did not want to sacrifice my career. I wanted my children to have the extra curricular opportunities which I also could not have facilitated on either end of the school day whilst also working. So in the same way the NHS is not available in the same way as private healthcare, this guided our decision for private education.

Sounds like it. About 15:30 she says it is an 'independent costing from a respected independent organisation and we're using [trips over her words and restarts] that as the basis for, you know, our work'

The IFS are a respected organisation and its not a bad report. But it's one report by one economist. Any report is going to be based on assumptions and methodology that others will question. It's not the basis for a firm policy decision. There's (understandably - the author is an economist not a tax lawyer) nothing in there about how it would be implemented and the difficulty of drafting the law. They need to do a huge amount of work if they're going to turn this into a sound and robust policy.

It's deeply worrying if they're pushing ahead with saying that they'll implement this as soon as they get into office (rather than starting work on the detail once they get into office). They're creating huge uncertainty for thousands of children and supposedly relying on its success for all the funding promises they are making on education.

I'm saving the state money by not being ill and not having children, also by not driving a car so they don't have to repair pot holes, can I have a tax break on cake please.

@jgw1

So as I said the income tax rate in the UK is not 50%.

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Well it all depends on the level of your income as to how much of that income is taxed. The higher the income the higher the tax.

But for £56k and above your marginal income is taxed by 49% assuming no student loan repayment which would add another 9%.

If you do pay student loans then a marginal rate of tax of 49.2% kicks in at £27k.

The opposite actually, you're costing the taxpayer by not having a car because you're not paying road tax, IPT on insurance, VAT and duty on fuel, VAT on purchase and repair of a car, etc., yet presumably you're still benefitting from the roads by means of taxis, buses, delivery vehicles to your home, etc and benefitting from the taxpayer subsidising public transport. At least car drivers pay towards the roads!

Depends on the salary of the person.

Someone on £150k in London who doesn’t drive or have kids and drops dead before they need care will always pay more than they use.

@Howpo

"How private school fees have escaped VAT for so long is a mystery to me."

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Because educational services are exempt from VAT:

www.vatupdate.com/2021/08/25/exemption-from-taxation-for-education-vat/

Mystery solved.

No more than the poster i was answering that wanted a rebate for going with private healthcare.

Its a service, VAT can be charged on services, just pay it and stop whinging.

And if that company has taxable turnover of over £85k it will charge VAT.

The mystery is why this exemption has been allowed to continue for so long, there is a perfectly adequate state sector, free for everyone..... private schooling is a luxury in almost all cases... more Agatha books for you!

Keir Starmer’s 20% VAT on private schools is against EU law that’s still part of UK legislation. A 2006 European Council directive on the tax specifically exempts “the provision of children’s or young people’s education, school or university education” and related goods and services

From Guido Fawkes. Interesting if true.

Because if you take away the "exemption" then state schools, academies, and all other "education" providers have to start charging VAT too - will parents like having to pay VAT on dance school lessons, gym/pool/sports lessons, music/instrument lessons - no I thought not, but that's what you're going to suffer!

VAT law is all about the nature of the goods/services, not about who provides them. Education is VAT exempt because it's for the good of society, like healthcare. "Luxury" doesn't enter into it, VAT is not based on whether something is deemed to be a "luxury" or not - that's just another lazy fallacy often trotted out by people who don't understand how VAT works (apparently like Labour spokespersons!).

Because private schools take the bulk of SEN and SN kids in the UK. Most boarding schools also take in children in care

I don’t know but interested too

So as I said the income tax rate in the UK is not 50%.

Isn't it wonderful that by leaving the EU we can get rid of some of these regulations that are making the UK a more unequal society.

We should rejoice in our freedoms.

Because under EU law it is ILLEGAL to charge VAT on education... and until recently we were in the EU.

No other country in the world charges VAT on education.

Starmer says that Labour won't be getting rid of any remaining EU laws... so he's either fibbing about that or fibbing about VAT on private schools.

Starmer just makes it up generally, lying comes easy

But yeh well done him being the only country to do it

They won't invest it in the state system, they will spend it on private tutors, extra curricular and homes next to the best schools...

Tbh, given the housing crisis, I’m a bit dubious about the claim that some people won’t be able to afford school fees, but will be able to find available, affordable housing in the catchment areas of coveted state schools, plus staff to help with wraparound care, plus tutors worth their salt.

I think Labour’s announcement on this is ludicrous as it lacks coherent thought, but I don’t think all the parents who can no longer afford private school fees can actually afford the cost of ensuring they get the houses in desirable catchment areas, schools, wraparound care, servants and activity clubs they would like in order to ensure their children get the educational package they want for them. That will be reserved for those who can afford VAT on school fees and domestic staff.

And yet with that increase in private school fees the number of students on their rolls has also increased, which rather suggests to me that the scaremongering over adding VAT is overdone. Additionally many schools will have factored in Labour winning the next general election, and so part of that increase already is to build a buffer to lesten further increases as a result of the VAT change.

May I ask were you similiarly indignant when the current government increased the same schools pensions costs by 69%?