VAT on private school fees

[user1486984759]

So I’m going to get crucified for this, BUT, let me get this straight:

• We pay 45% tax, thereby funding state schools
• We do not get any benefits, and those that do get priority when it comes to state school admissions
• We scrimp and save from what’s left after paying 45% tax to pay for our kids’ education
• And now the state is going to add 20% to our school fees to fund state schools
• So we pay the most to fund state schools, but when it comes to state school admissions, we are last in line

How is this fair?

It seems that in this country, the best places to be are (1) a non-dom billionaire, or (2) someone who doesn’t pay taxes, gets all the benefits, and gets priority in state school admissions. The hard working PAYE earners are screwed by parties from left, right and center.

With 53.8% of all UK individuals being net recipients (living in households receiving more in benefits than they paid in taxes), that's not surprising at all. So are you revelling at the prospect of the government now going a step further, redistributing the private school assets and further penalising the private school parents who are contributing into the system?

My combined family income is 55,000. Two teachers on leadership scale could easily be on over 100,000 between them, and would certainly be up there in the income deciles. They wouldn’t necessarily be scrimping either. I am not one of those teachers. Nor do I consider myself to be scrimping. As stated upthread, I feel very fortunate to have a reliable and reasonable income (though think it is shocking how much less I earn in real terms than I used to).

@Nellodee but I haven't said that both parents are teachers have I?

Some schools agree to a charge on your home.
When you move or die they get the fees owing.

Private school parents are by and large in the top 5%.
2.5x the investment is made per private pupil than per state pupil.

All working parents “contribute into the system” so why should privileged parents get to buy a better education for their children VAT free with some sort of “charity” status when being in the top 5% of household incomes hardly makes the family a “charity case” insofar as society is concerned.

We’re back to the “be grateful we pay your taxes” argument, are you?

Personally I’m more of a “secure for the workers by hand or by brain the full fruits of their industry and the most equitable distribution thereof that may be possible upon the basis of the common ownership of the means of production, distribution and exchange and the best obtainable system of popular administration and control of each industry or service” person.

As members of the top ten percent, your income is highly likely to be formed on the fruits of other peoples labour. You pay more taxes because you are creaming off more profit in the first place. You don’t earn more because you deserve more. The poster upgrade who spoke about how the person in the tow current thought they had become an amazing swimmer was spot on.

The parents I mentioned are not on the leadership scale. They are primary class teachers.

They dont get charity status because they are a school.
Their status is based on what they do for the community or others

Examples
Free places for looked after or low income pupils based on achievements in music, sport, academic ability etc
Use of facilities for other community groups and or schools. Such as sports, theatre etc One of our schools built a sports centre, available to the entire town.
Provision of free equipment to local schools.
Free tuition in music and other subjects not normally available in state
Free classroom extra support to state schools
Free places for SEN pupils
Free or reduced fees for education and boarding for children of the armed forces who are based temporarily abroad or permanently if nothing is available in the country they are stationed.
etc etc

This is regularly checked
If schools don’t do enough they loose their status

Two children in private school. I will also glady pay another 20% to maintain high quality education and classes sizes of 12. If fewer children attend because of the increased fees then that’ll add to the advantage of those that do attend.

I know a teacher who sent her children to private school as well. Her husband ran the local hospital trust. What exactly is the point of giving one parent’s occupation?

Back to obfuscation and topic changing.
The simple reason VAT hadn't been applied before is due to EU law. With Brexit Labour can bring this in however it isn't that easy as potentially we could still be under that law.
The potential gains from VAT hasn't been ring fenced by Labour sp will go into general taxation pot. It won't even cover the cost of replacing concrete, let alone all the other things promised.
It is the Tory NHS 350 million bus all over again and some people are naive enough to fall for it.

Bursaries play no part in increasing participation in lower income deciles. The proportion of students receiving a bursary is surprisingly constant across all income deciles.

I don’t think anyone really thinks that the charity work private schools do makes a substantive difference to anyone. It just seems like they’re manipulating a tax break, let’s be honest.

Annoyingly that's on the charity status thing which we've already established even the Party whose policy it was didn't understand.

49% think they should pay vat, against 11% who don’t.

Hmm slight misreporting there, as you say, the pool was on charitable status, not vat.

But part of losing your charitable status is that all assets and holdings that were obtained from philanthropic donations have to be transferred to another charity. If I make a donation to a charity, that charity simply isn't able to later decide that it's not a charity any more and just keep my donation. They can show that they already spent my money, and some schools will be able to do this, but a great many couldn't possibly - especially if they have physical buildings which were built from the proceeds of a capital fundraising campaign, or have a large charitable endowment fund (investment holdings where the investment income is used to fund scholarships and bursaries but the capital isn't spent). Those schools would find that their buildings and assets simply cannot be redefined as the property of a private non-charitable body.

No exemption required - they would just increase the Continuity Of Education Allowance ceilings

Surely special rules for the transfer of schools to non charitable bodies could be put in place?

Or perhaps that’s why the VAT plan is simpler.

Would be interesting in Edinburgh where 1 in 4 children are educated privately!

Annoyingly the question is clear about whether private schools should be tax exempt.

Also interesting is that YouGov shows Labour gaining against Conservatives over the last few days (Con 24%, Lab 45%, 26-27 Sep 2023 compared to Con 27%, Lab 43%, 21-22 Sep 2023).

But doesn’t that mean the taxpayer foots the VAT bill? Surely that’s not what Labour want? Hence the need for an exemption.

Only by completely tearing up the rule book on the very nature of ownership of assets in a fair and just society.

If I had made a £500,000 donation to a school to fund an endowment where the income would be used for a named 100% scholarship in perpetuity to allow a poorer student to attend, and made that donation over a number of years to enable Gift Aid to be received, then it would be a monstrous injustice for any kind of legislation to be passed that retrospectively allowed that donation to become a private asset that isn't subject to Charity Commission regulation.

It's a very complex area, with considerable scope for unintended consequences (across the whole charitable sector)

I'm not remotely surprised they have ruled it out as a policy option

Meh, so long as the scholarship was somehow guaranteed, I don’t think you could describe it as “monstrous”. Sounds like the labour “u-turn” may actually have been a pragmatic workaround to me.