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VAT on private school fees

1000 replies

user1486984759 · 27/09/2023 20:42

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.

OP posts:
Thread gallery
21
Araminta1003 · 29/09/2023 10:12

@SaffronSpice - Brampton Manor is an interesting example because they have homework and discipline policies which put off the lazy parent. They attract the aspirational hard working (probably not very rich) immigrant parent.

Labour are underestimating the ethnic minority vote. They need to be more careful. Rishi is the poster boy of aspirational immigrant success. It is education, his parents ambition and marriage that got him there. He wasn’t born a powerful billionaire, far from it.

EmpressoftheMundane · 29/09/2023 10:19

Brampton Manor would not suit all children. But there are more DC who would suit Brampton Manor than there are places there, or at equivalent schools.

There would have been, if the grammers weren’t decimated. Private schools rocketed when selective schools were closed down in many areas.

This plan isn’t just about money, taxes and paying privately. It’s ideologically against schooling by academic ability. It’s part of forcing as many children as possible into comprehensive schools.

Barbadossunset · 29/09/2023 10:25

SaffronSpice · Today 09:35

As for VAT, it’s a slippery slope to no longer say that education is VAT exempt

VAT on university fees anyone? How do they differ from private schools other than student age?

The legal ramifications of imposing VAT are going to be interesting. Posters used to say re removing charitable status, all Labour has to do is change the laws and bingo! No more charitable status.
Evidently it’s not as simple as that as they’ve now rowed back on their promise.

WhileMyDishwasherGentlyWeeps · 29/09/2023 10:38

Barbadossunset · 29/09/2023 10:25

SaffronSpice · Today 09:35

As for VAT, it’s a slippery slope to no longer say that education is VAT exempt

VAT on university fees anyone? How do they differ from private schools other than student age?

The legal ramifications of imposing VAT are going to be interesting. Posters used to say re removing charitable status, all Labour has to do is change the laws and bingo! No more charitable status.
Evidently it’s not as simple as that as they’ve now rowed back on their promise.

I suspect it’s no more difficult to exclude private schooling from charity and related status (like not-for-profit in its various corporate forms) than it is to change the VAT rules. It may well be simpler, in fact.

The difficulty with excluding schooling as charitable is that charities often have very debatable aims, when tested against general human social benefit. Animal charity is a good example. It doesn’t look very good to give tax breaks, gift aid etc for stray dog shelters but not for the education of children.

SaffronSpice · 29/09/2023 10:42

If there was a ‘Brampton Manor’ in every town, how many parents would pay for private school instead?

WhileMyDishwasherGentlyWeeps · 29/09/2023 10:45

SaffronSpice · 29/09/2023 10:42

If there was a ‘Brampton Manor’ in every town, how many parents would pay for private school instead?

There used to be. They were called grammar schools.

BodgerSparkins · 29/09/2023 11:02

Wow, perhaps we are really are lacking in political education in this country if people think Keir Starmer's policies are in any way socialist, or if socialism has anything to do with aspiration or consumer choices. Yikes. I wish some of them were. I would love cooperatively owned public transport that actually worked like in Germany, would love a health service from which the profit motive was removed at every stage, love it. And I'd still go to Waitrose, after getting off my cheap, fairly price, punctual train. Anyway, I digress.

OP, you're obviously upset at the prospect of this change that may or may not happen - sounds far more likely not. I get that, it would have personal ramifications for you and perhaps a wider section of society than people imagine. Got it.

If you can't see why your post has gotten people's backs up though, it's the wording. Lots of it. The implications of what you're saying (whether or not it's what you intend) are patronising and inaccurate.

  • "We pay 45% tax, thereby funding state schools" - you pay 45% tax on earnings over 125k, per person in your household. I have said elsewhere that it's legitimate to take issue with the level at which this is set, it's not legitimate to state it here as the implication, whether you mean it or not, is that other people don't work, pay tax, may have paid higher rates of tax than you in the past and contribute in an equally meaningful and monetary way. You have the good fortune to have a well paid role, it may be a challenging role for which you studied a long time. There are plenty of similar positions which require incredibly hard work and knowledge, which aren't remunerated at anything like that level - including the doctors you reference elsewhere. That isn't your fault but it perhaps isn't the point to lead with. You aren't paying for someone else's child's state education, for which they should be grateful to you, you even state your frustration elsewhere that you doubt this extra money will go where you'd hope it would.
  • "We do not get any benefits, and those that do get priority when it comes to state school admissions"...pardon? no. You seem to have a distorted idea of who out there receives benefits, again, not your fault, our media would often have you believe that there are unworthy scroungers on every corner (it's not true.) What is true is that there are people out there working full time hours, sometimes in professional careers, who can't pay their rent, have no hope of ever owning a home and can't feed their children. That's not their fault either, that's the fault of wage stagnation, greed and corruption.
  • "We scrimp and save from what’s left after paying 45% tax to pay for our kids’ education" - good, you prioritise education, it's an admirable value. Perhaps take another look at your local state school provision, you might be more impressed than you think. I've tried to make the point elsewhere but there is massive variability not only in the state sector but also private, and things change within the period of a few short years.
  • "And now the state is going to add 20% to our school fees to fund state schools"....sigh
  • "So we pay the most to fund state schools, but when it comes to state school admissions, we are last in line", who is this 'we'? you are inadvertently setting up an 'us' and 'them'. The state school cohort is enormous, most parents pay taxes. Some pay taxes at the level of what you likely pay, and some even more.

To also say that state school candidates will be 'crushed' by students who would otherwise be going to private school in grammar school entrance exams also implies (again, whether you mean to or not) that you think that private school destined children are in some way naturally more able than other children, where they likely are of comparable mixed ability. I responded elsewhere to your later point that 'but they will have more tuition' pointing out that plenty of state educated people have extra tuition, are sometimes themselves the children of teachers and come from a far wider section of society, on a numbers game alone there will be more academically gifted children within the much larger group than the smaller. Nobody is going to be crushed. Can you see why the implication of your statement would have made people roll their eyes?

Points that if led with might have engendered a better discussion....

'This proposal to charge VAT on private schools is so poorly thought out. It's going to push a lot of people out of private schooling who have turned to it for a multitude of reasons, and who work in professions that are well paid but we aren't the super wealthy people imagine.

It's also going to have implications to other parts of society, Universities, private tuition, anything where education is the supply.

I personally feel penalised by this for wanting to make what I think is the best choice for my child. It will mean we have to seriously reconsider private education and I am not confident we can find the same standard of education outside of the private sector.'

It's not so inflammatory, boring even, probably wouldn't have gotten many responses but it might have been a better conversation? You might have received assurances on your alternatives, empathy, recognition of the fact it seems a poor and headline grabbing suggestion in the first place.

morechocolateneededtoday · 29/09/2023 11:04

SaffronSpice · 29/09/2023 10:42

If there was a ‘Brampton Manor’ in every town, how many parents would pay for private school instead?

Work ethic is a major issue. Just look at the many threads from parents about not believing their primary aged child (and often older) should be doing any homework.

I am all for not having excessive homework - childhood should be fun and carefree but the number of parents who seem to be utterly oblivious that good work ethic starts at home. A small amount of mental arithmetic and spelling practice alongside reading in the primary years will pay off infinitely when they start secondary.

As the article itself mentions, the success is due to the hard work of the students. I would love to avoid private and use a college like this - I want my children to be educated with others who hold the same values towards education. As the child of a working class immigrant, I do not care one bit about the wealth of their peers

BodgerSparkins · 29/09/2023 11:10

morechocolateneededtoday · 29/09/2023 11:04

Work ethic is a major issue. Just look at the many threads from parents about not believing their primary aged child (and often older) should be doing any homework.

I am all for not having excessive homework - childhood should be fun and carefree but the number of parents who seem to be utterly oblivious that good work ethic starts at home. A small amount of mental arithmetic and spelling practice alongside reading in the primary years will pay off infinitely when they start secondary.

As the article itself mentions, the success is due to the hard work of the students. I would love to avoid private and use a college like this - I want my children to be educated with others who hold the same values towards education. As the child of a working class immigrant, I do not care one bit about the wealth of their peers

Might also have something to do with the evidence of decades of research that indicates homework for primary children has no appreciable effect on Children's outcomes?

In secondary of course that changes, but it is still very much dependent on the nature of the homework set.

I don't disagree that children should be made to understand the value of their education, but to pick up on people's attitude to primary school homework as evidence of their attitude one way or another is probably not a good place to start.

Araminta1003 · 29/09/2023 11:11

https://comprehensivefuture.org.uk/

The ideology hates grammars and hates private schools.

The trouble I am having is that you cannot import a huge swathe of ambitious people into your country from all over the world, and not also recognise that they do not necessarily think like your North London rich comfortable leftie white cyclist. If their culture is all about Education and they believe in selection or paying up and hours of work set by teachers, then you have to as a government respect their views too. Especially given your colonial history.

And yes, VAT on private school fees is also downright sexist, if it will indeed lead to less working hours for women with children.

WhileMyDishwasherGentlyWeeps · 29/09/2023 11:12

I tend to agree with that post generally, Bodger.

But what does this mean:

…health service from which the profit motive was removed at every stage, love it.

Surely you don’t mean that pharma companies or the makers of beds, wheelchairs, prosthetics, operating theatre equipment, doctors’ prescription pads, windows, plumbing, lightbulbs, mops and buckets and everything else should be taken over by the state and run without profit?

I can’t think of any public service that owns the means of production and use for everything it does. Not the police, not the military, not the NHS, not state schools, none.

BodgerSparkins · 29/09/2023 11:18

In fact, Waitrose is itself a cooperatively owned company where profits are shared amongst partners and reinvested in benefits (amazing hotels, country clubs and sports facilities) for the use of all partners. So possibly the worst example to call upon if wanting to make a point against socialist principles?

user1486984759 · 29/09/2023 11:23

BodgerSparkins · 29/09/2023 11:02

Wow, perhaps we are really are lacking in political education in this country if people think Keir Starmer's policies are in any way socialist, or if socialism has anything to do with aspiration or consumer choices. Yikes. I wish some of them were. I would love cooperatively owned public transport that actually worked like in Germany, would love a health service from which the profit motive was removed at every stage, love it. And I'd still go to Waitrose, after getting off my cheap, fairly price, punctual train. Anyway, I digress.

OP, you're obviously upset at the prospect of this change that may or may not happen - sounds far more likely not. I get that, it would have personal ramifications for you and perhaps a wider section of society than people imagine. Got it.

If you can't see why your post has gotten people's backs up though, it's the wording. Lots of it. The implications of what you're saying (whether or not it's what you intend) are patronising and inaccurate.

  • "We pay 45% tax, thereby funding state schools" - you pay 45% tax on earnings over 125k, per person in your household. I have said elsewhere that it's legitimate to take issue with the level at which this is set, it's not legitimate to state it here as the implication, whether you mean it or not, is that other people don't work, pay tax, may have paid higher rates of tax than you in the past and contribute in an equally meaningful and monetary way. You have the good fortune to have a well paid role, it may be a challenging role for which you studied a long time. There are plenty of similar positions which require incredibly hard work and knowledge, which aren't remunerated at anything like that level - including the doctors you reference elsewhere. That isn't your fault but it perhaps isn't the point to lead with. You aren't paying for someone else's child's state education, for which they should be grateful to you, you even state your frustration elsewhere that you doubt this extra money will go where you'd hope it would.
  • "We do not get any benefits, and those that do get priority when it comes to state school admissions"...pardon? no. You seem to have a distorted idea of who out there receives benefits, again, not your fault, our media would often have you believe that there are unworthy scroungers on every corner (it's not true.) What is true is that there are people out there working full time hours, sometimes in professional careers, who can't pay their rent, have no hope of ever owning a home and can't feed their children. That's not their fault either, that's the fault of wage stagnation, greed and corruption.
  • "We scrimp and save from what’s left after paying 45% tax to pay for our kids’ education" - good, you prioritise education, it's an admirable value. Perhaps take another look at your local state school provision, you might be more impressed than you think. I've tried to make the point elsewhere but there is massive variability not only in the state sector but also private, and things change within the period of a few short years.
  • "And now the state is going to add 20% to our school fees to fund state schools"....sigh
  • "So we pay the most to fund state schools, but when it comes to state school admissions, we are last in line", who is this 'we'? you are inadvertently setting up an 'us' and 'them'. The state school cohort is enormous, most parents pay taxes. Some pay taxes at the level of what you likely pay, and some even more.

To also say that state school candidates will be 'crushed' by students who would otherwise be going to private school in grammar school entrance exams also implies (again, whether you mean to or not) that you think that private school destined children are in some way naturally more able than other children, where they likely are of comparable mixed ability. I responded elsewhere to your later point that 'but they will have more tuition' pointing out that plenty of state educated people have extra tuition, are sometimes themselves the children of teachers and come from a far wider section of society, on a numbers game alone there will be more academically gifted children within the much larger group than the smaller. Nobody is going to be crushed. Can you see why the implication of your statement would have made people roll their eyes?

Points that if led with might have engendered a better discussion....

'This proposal to charge VAT on private schools is so poorly thought out. It's going to push a lot of people out of private schooling who have turned to it for a multitude of reasons, and who work in professions that are well paid but we aren't the super wealthy people imagine.

It's also going to have implications to other parts of society, Universities, private tuition, anything where education is the supply.

I personally feel penalised by this for wanting to make what I think is the best choice for my child. It will mean we have to seriously reconsider private education and I am not confident we can find the same standard of education outside of the private sector.'

It's not so inflammatory, boring even, probably wouldn't have gotten many responses but it might have been a better conversation? You might have received assurances on your alternatives, empathy, recognition of the fact it seems a poor and headline grabbing suggestion in the first place.

@BodgerSparkins I take your point that my wording was poorly thought out and lacking in empathy. Equally lacking in empathy are the tiny violins. Equally condescending are you and others when you explain that 45% is my marginal tax rate, not the overall tax rate. I know that very well, thank you very much! My overall tax rate is >40%

I already explained elsewhere that I do not think privately educated kids are smarter, only that they receive more/better training. Standardized test results are highly correlated with tutoring. And just like not all schools are created equal, not all tutors are created equal. There are those that charge £100/hr and those that charge £30/hr.

OP posts:
WhileMyDishwasherGentlyWeeps · 29/09/2023 11:25

BodgerSparkins · 29/09/2023 11:18

In fact, Waitrose is itself a cooperatively owned company where profits are shared amongst partners and reinvested in benefits (amazing hotels, country clubs and sports facilities) for the use of all partners. So possibly the worst example to call upon if wanting to make a point against socialist principles?

Is that to me?

What’s mutuality got to do with it? Waitrose buys from suppliers who profit. Charities buy from suppliers who profit. There are no shareholders in the NHS. What’s the “every stage” you meant?

I’m sure the NHS can be improved but I genuinely can’t see how it can work without making someone, somewhere a profit.

WhileMyDishwasherGentlyWeeps · 29/09/2023 11:27

Sorry Bodger. I realise now what the reference to Waitrose was about. Not me. My bad.

SabrinaThwaite · 29/09/2023 11:27

WhileMyDishwasherGentlyWeeps · 29/09/2023 07:59

🙄

If you’d bothered to read the links you would have seen, for example:

Under VAT law in the UK, the provision of education by an “eligible body” (which includes a registered independent school) is an “exempt” supply for VAT purposes. Goods and services that are closely related to education are also exempt from VAT eg catering, transport, school trips and boarding accommodation.
In addition, there is a separate VAT exemption for a charity or not-for-profit entity which supplies education or vocational training if it…

So education services are VAT exempt in themselves. But if that exemption were abolished education services would still be exempt if provided by a charity. Any Labour legislation will have to take away VAT by reference to both situations. Half of independent schools are charities so half of the schools being targeted will need the charity VAT change enacted otherwise they’d lose VAT exemption as a school per se but keep it as being a charity.

So it is true that Labour believes the care of Romanian street dogs to be more worthy of tax relief than the education of some children.

There is no need to change charity law (which would be difficult) to change the VAT rules to remove the education exemption for providers.

Charity providers of education services are exempt because of the current definition of exempt supplies in the VAT Act 1979.

Remove the education supply exemption in the Act and the exemption no longer applies to charities either.

BodgerSparkins · 29/09/2023 11:37

WhileMyDishwasherGentlyWeeps · 29/09/2023 11:12

I tend to agree with that post generally, Bodger.

But what does this mean:

…health service from which the profit motive was removed at every stage, love it.

Surely you don’t mean that pharma companies or the makers of beds, wheelchairs, prosthetics, operating theatre equipment, doctors’ prescription pads, windows, plumbing, lightbulbs, mops and buckets and everything else should be taken over by the state and run without profit?

I can’t think of any public service that owns the means of production and use for everything it does. Not the police, not the military, not the NHS, not state schools, none.

I was perhaps speaking in too broad strokes, it's not meaning the things that the NHS buy and pay for should not draw a profit for the companies they buy them from, or for the researchers they fund - of course not, and in fact the NHS because of its size, if it negotiates as 'one' can obtain all of this at very fair prices simply because of the economy of scale, which is destroyed if it's pulled apart into a hundred thousand different subcontracts under the 'banner' of the NHS. It is also, under the NIHR, funds a lot of that pharmaceutical research so it's all part of the same circle anyway.

If the NHS is not one body, but instead a series of commercial contracts - companies, take, for example, a company subcontracted to provide food for patients for example, as it's the simplest I can think of without getting into why the involvement of private enterprise within a healthcare system creates conflicts of interest (see America.) The caterers are paid x by the nhs, to provide 100 meals. They have overheads of their own, naturally, and seek to make a profit as any commercial enterprise should. Therefore they cannot (and should not) spend the entirety of x on those meals and the people and equipment they need to provide them, a good portion of it needs to be reserved as profit...to say nothing of marketing. If the catering was instead part of the NHS, there would be no profit motive. Yes, you have to pay salaries, and for equipment, but you have to pay for these through the third party anyway.

I am not explaining it very well, and am likely getting the thread wildly off track. This tribune article is good. It was a bit of a side comment, didn't mean to get into it. oops.

Privatisation is Killing the NHS (tribunemag.co.uk)

Privatisation is Killing the NHS

More than a decade of privatisation and underfunding has left the NHS on its knees. If we want to preserve a public health service that is free at the point of use and available to all, now is the time to fight for it.

https://tribunemag.co.uk/2023/03/privatisation-is-killing-the-nhs#:~:text=Britain%27s%20adult%20social%20care%20system,their%20care%20and%20underpaying%20staff.

BodgerSparkins · 29/09/2023 11:40

WhileMyDishwasherGentlyWeeps · 29/09/2023 11:27

Sorry Bodger. I realise now what the reference to Waitrose was about. Not me. My bad.

yep and your comment supports what I was saying about companies run on cooperative values being good all round, and far down so many chains, so thanks, it's well put

BodgerSparkins · 29/09/2023 11:41

user1486984759 · 29/09/2023 11:23

@BodgerSparkins I take your point that my wording was poorly thought out and lacking in empathy. Equally lacking in empathy are the tiny violins. Equally condescending are you and others when you explain that 45% is my marginal tax rate, not the overall tax rate. I know that very well, thank you very much! My overall tax rate is >40%

I already explained elsewhere that I do not think privately educated kids are smarter, only that they receive more/better training. Standardized test results are highly correlated with tutoring. And just like not all schools are created equal, not all tutors are created equal. There are those that charge £100/hr and those that charge £30/hr.

I know, and I understand that. I think people were just irritated with your original wording, you make valid points, it's just...well it's the internet.

SabrinaThwaite · 29/09/2023 11:48

Araminta1003 · 29/09/2023 10:12

@SaffronSpice - Brampton Manor is an interesting example because they have homework and discipline policies which put off the lazy parent. They attract the aspirational hard working (probably not very rich) immigrant parent.

Labour are underestimating the ethnic minority vote. They need to be more careful. Rishi is the poster boy of aspirational immigrant success. It is education, his parents ambition and marriage that got him there. He wasn’t born a powerful billionaire, far from it.

Brampton Manor is a highly selective sixth form.

https://www.policyconnect.org.uk/news/state-school-it-certainly-not-comprehensive

This is a state school, but it is certainly not comprehensive.

In many ways, Brampton Manor Academy 6th Form is not like other schools. It made headlines this week as 41 of its students secured offers for undergraduate study at Oxford and Cambridge.

https://www.policyconnect.org.uk/news/state-school-it-certainly-not-comprehensive

WhileMyDishwasherGentlyWeeps · 29/09/2023 11:59

SabrinaThwaite · 29/09/2023 11:48

One for the benefits of selection then! Reminds me of Hackney Downs grammar. Check out the alumni, incredible, and so many from poor backgrounds.

Then it went comp and eventually collapsed.

BodgerSparkins · 29/09/2023 12:11

Araminta1003 · 29/09/2023 11:11

https://comprehensivefuture.org.uk/

The ideology hates grammars and hates private schools.

The trouble I am having is that you cannot import a huge swathe of ambitious people into your country from all over the world, and not also recognise that they do not necessarily think like your North London rich comfortable leftie white cyclist. If their culture is all about Education and they believe in selection or paying up and hours of work set by teachers, then you have to as a government respect their views too. Especially given your colonial history.

And yes, VAT on private school fees is also downright sexist, if it will indeed lead to less working hours for women with children.

Yes I can see it would (if it ever happened) have a disproportionate affect on women and their work, like most changes around education and childcare, the default option does always seem to be for the woman's career to alter to accommodate.

Nobody is suggesting that that consumer choice be removed though, there is a (to me unlikely) sounding suggestion it be made more expensive, but nobody with a chance at power looks to be wanting to meaningfully change schools in the uk for anyone, which is a shame. There are probably people out there (not me) with brilliant proposals, perhaps emulating what works elsewhere, that don't get a chance to put them forward or affect policy at all.

SaffronSpice · 29/09/2023 12:13

SabrinaThwaite · 29/09/2023 11:48

Yes, and?

SabrinaThwaite · 29/09/2023 12:32

SaffronSpice · 29/09/2023 12:13

Yes, and?

It’s not a model that can be replicated across all state schools, is it? 1 in 10 applicants accepted, so it creams off the top performing GCSE students across a wide area.

BodgerSparkins · 29/09/2023 12:33

But is the one charging £100 hour definitely a better option than the person charhing £30? Maybe, maybe not.

My point about your tax band(s) is it's not what to lead with if you really wanted a discussion about vat on school fees and charitable status, and that to state you pay '45% tax' is not correct, but it's not important to the discussion either way, and yes people were going to pick up on it as inaccurate (myself included) which has derailed the conversation. Take issue with it on a seperate thread, there are solid arguments as to why that line should be higher. I would support that being changed, and I don't earn anything like it.

We can tie ourselves in knots here on all the side points. It probably won't happen. It isn't well thought out. It's annoying when think tanks come up with these daft ideas they think will win support, it's patronising to everyone and sews division where there needn't be any.

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