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.

Thanks that makes more sense now.

No, that’s not true. Free school meals don’t come into it.

Looked after children get priority,

then usually children with exceptional medical or social needs (supported by professional evidence),

then usually siblings,

then children of teaching staff who have been in post for two years,

then distance. (Hence high prices close to outstanding schools.)

Church schools have extra criteria regarding church attendance which are taken before distance.

I totally agree. It’s ridiculous. For those saying it’s “only” 20%, it’s a huge amount, especially when you have more than 1 child. On that example above, it’s almost £10k extra per year, just in tax, for 2 children. And that’s out of income that’s already been taxed. Assuming a 40% income tax rate, that’s almost £17k extra per year out of gross pay. This is on top of the cost of living crisis, where a lot of families (private and state school families) have had huge increases in mortgage and other costs.

It is true that FSM (pupil premium as proxy) can be take into account by the Schools.

It is true that FSM (pupil premium as proxy) can be take into account by the Schools.

It can be but it isn’t. None of the dozen or so schools whose admission criteria I’ve studied in depth recently has mentioned it.

Some people are blinded to the poverty in this country.
23.8% of children in this country are eligible for free school meals - one good reason why the rich should pay their way. They can afford to.

https://explore-education-statistics.service.gov.uk/find-statistics/school-pupils-and-their-characteristics#

I have posted up thread a bbc website that shows you every grammar school in England, which one has priority towards PP pupils. Not all the school use this policy but some definitely ARE.

https://www.bbc.co.uk/news/education-64714201
This link give you an idea of every single grammar schools policy for priorty for deprived children.

23.8% of children in this country are eligible for free school meals - one good reason why the rich should pay their way. They can afford to.

I think the one who CAN afford opt for private schools? That certainly lift up some burdens on the state sector? Not sure about the policy that make these family become no longer afford though.

Not all parents who send their children to private school are rich by any means. It is often a huge sacrifice we make and one that doesn't come easy at all. You cannot generalise that all children at private schools are from wealthy families. This is not our case at all. The 20% increase plus fee increases will mean that some families simply cannot afford to keep their children in a school that they are thriving in. I don't see why private school fees increased vat should pay for state schools. Doesn't seem fair at all.

one good reason why the rich should pay their way. They can afford to.

They are doing. They’re paying for their children’s education themselves rather than the state paying for it.

I don't see why private school fees increased vat should pay for state schools.

The ridiculous thing is that the VAT won’t be paying for state schools. Even the optimistic estimates of the amount it will raise are around 1% of the state education budget. In reality, I doubt it will raise even that much by the time legal and admin costs are taken into account. I wouldn’t be surprised if the policy actually leads to a net loss. Of course they would never admit this.

Private schools - the decent ones, anyway - will not pass on the full 20 percent to parents. They will likely pass on about 12 percent for the first few years - but the fees (before vat) will also rise.

So you are probably looking at a competitive London private school that charges 8.5k a term now, nudging 10k per term within 3 years. If you have 2 or more kids already and stretch yourselves and your mortgage has gone up and the cost of living is impacting - it will become unsustainable unfortunately…

It is not a question of being decent. Many private schools simply do not have a buffer to do that.

@SaffronSpice - yes sorry, perhaps that sounded a bit sweeping! I was thinking 'decent' as in, well-established private schools that are competitive to get into and achieve very good GCSE/a-level results usually have a fair amount of cash reserves and/or endowments. They'll also have smart bursars and accountants who can work out ways not to pass the full 20 percent onto parents - eg claiming back VAT on previous building work or working out what truly constitutes an 'educational offering'.

I do realise, though, that not every private school is in this position and often run on much tighter margins - and that is a problem of course.

Finally (and hopefully such schools are in the minority!), I wouldn't be surprised if a few genuinely 'less decent' privates do see this as a way to generate more income for themselves - i.e. there are ways to minimise their own VAT bill and they will do that, but they will still add the full whack onto fees.

https://inews.co.uk/news/labour-private-school-tax-wealthy-poorer-children-grammars-2875633#:~:text=Labour's%20plans%20to%20charge%20VAT,in%20the%20sector%20have%20warned.

Even state grammar heads are expressing concern.

Actually @goldenpepper a lot of the most successful independent day schools outside London are the ex Direct Grant schools. Many of these made the choice to either revert to independent staus or become independent following the abolition of the 11 plus system in most of the country.

These schools are very successful on a day to day basis, they cover their costs and run pretty tight ships, they don't offer the prestige and over blown extra curriculars of the big public schools but they get good results, offer smaller classes than the state schools and a wider curriculum and crucially they cater for the middle/professional classes. The vast majority of parents at these schools are covering the cost out of income or possibly from grandparents , they are often paying by monthly DD. These schools do not have big reserves, 30 pupils either way of the optimum , up or down, can cause havoc with their financial modeling . These are the schools which are worrying.

Thanks for sharing @Another76543 . Unable to read in full, but it is heartening to see an emerging appreciation that this policy will have broader negative implications for the educational system.

At least people are picking up on the obvious finally but still slow clap for Labour

crucially they cater for the middle/professional classes

What does that mean - no working class oiks?

Are you actually wanting to know what "middle/professional classes" means or did you just want to post a snarkey comment?

Please educate me.

You are right op. There is no benefit to being a higher rate tax payer. You don't get any priority for state schools either.

Anyone who can afford to send a child to private school is rich and you know it.
Exactly what huge sacrifices are you making? New cars? Holidays abroad? Detached house? Eating out? These are things that most people cannot afford.
It doesn’t stop you being rich if you choose to spend large amounts of money on school fees instead of other luxuries- it’s just how you have chosen to spend your wealth.
I have seen nonsense on here saying things about driving old cars and only having holidays in Wales as if that makes them seem poor. Makes my blood boil.
Poor and anverage people absolutely cannot afford private schools. If you can afford it you are rich. End of story.

What about SEN private schools ?

All I meant is that they don’t tend to cater to the super rich or oligarchs . Of course there are people from working class backgrounds but to win an election it is generally accepted that Labour need to have the votes of the middle classes, the doctors, dentists, accountants, lawyers, teachers etc who are well off enough to pay fees but only just.

Get over yourself! And take the chip off your shoulder. You have no idea what it has taken to send our daughter private. She was bullied so badly at state school it was a decision we made as a family. Our whole extended family helps us with the fees, if this is what’s being classed as rich then you are sadly mistaken. It’s the BEST decision we ever made to see our daughter happy and I would do it again a hundred times over.