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.

This really isn’t the reality for many parents at private school. Are there wealthy families? Yes of course there are. However, there are also families who are on fairly average salaries. For example, they’ve chosen to have only 1 child, both parents work long hours (sometimes shift work), other family members (both sets of grandparents, uncles etc) chip in a bit. Some families remortgage their house to release any equity for fees. Just because they’ve made a decision to use private education does not make them “rich”. It’s not unusual for around 20% of pupils to be on some kind of means tested bursary - they get given help with fees due to income levels.

Some families choose to spend thousands of pounds a year on smoking. Does that make them “rich”? You can’t describe someone as rich just because they spend their money on something you don’t agree with.

@Another76543 You've pretty much described our situation there except help from family. We had one child, could no way afford to send two. Remortgaged our current house rather than upsizing to pull out equity to pay for secondary school.

I just think its a very slippery slope, if it's OK to put vat on private school fees, what about private nursery - you must be rich?

What about wrap around care - you must be rich?

Really slippery slope!

Private healthcare (insurance premiums would also rise), university fees, nurseries, car and home insurance, books, flights. The list is endless. These are all things which many people cannot afford. If we follow the logic that private school fees should be taxed because not everyone can afford them, all of the above should be subject to VAT too.

University fees is another one - they are essentially the same as private schools. If it's OK to tax private school education why not University and nursery?

People need to be very careful what they wish for.

There's another thing what about, subject tuitors like maths, English, science? Lots of people top up kids school lessons with private tuition.

If subject tuition is subject to VAT that would also mean things like piano and singing lessons would also be subject to VAT.

Then what about sports, things like, swimming lessons, dance and football classes?

It wouldn't be moral to charge VAT on children's basic schooling that is legally required but at the same time have swimming and dance classes VAT free.

Now what they possibly could get away with is VAT on the residential element of boarding school.
But that's similar to childcare. So parallel could be drawn with nursery and childminders.

@Sugarfree23 whataboutery is never a great argument. For a start a great many of those having said private subject tutors are also going to private school - they are getting help upon help heaped upon them. In fact I believe the Sutton Trust did a survey which showed that the biggest users of the ad hoc tuition sector were those who were already affording private education. My children left their comprehensive between 8 and 10 years ago and I would say we were among a minority of parents who could have stumped up for private tuition. We didn't as it happens. But I can safely say the vast majority of parents could not have afforded it.

Well, no body knows who is the majority of taking out tutoring or other extra curriculum educational activities.

For the fairness of the system why not apply it to these activities too, it will raise way more money.

There seems to be an assumption that because private school parents are wealthier, they should pay more and this tees up all these people saying that these parents aren’t wealthy. We have a tax system. It’s progressive. People who earn more, pay more and a greater percentage as they get paid more. If it isn’t progressive enough, increase the rates for higher earners. Putting VAT on school fees is just class warfare. It’s incredibly disruptive and full of unforseeable consequences. I really hope they drop this one.

So you've never paid for any part if your children's education, swimming lessons, dance, music lessons, nursery?

I firmly believe putting VAT on school fees will mean very quickly all other elements of education, nursery, uni, music tuition, dance, lots of sports coaching, will also lose their except status.

And I do not believe that to be fair.

I have no axe to grind here - none of my kids have gone private (not enough money!) - but it isn’t much of an argument to say that wealthier parents use tutors. That’s the whole point.

Many better off parents who could go private choose not to but game the system by buying into pricey catchments of good state schools and use tutors, crammers and so on. There’s no proposal to make this ‘backdoor private’ route financially more onerous.

I suspect that much of the opposition to VAT changes among privately paying parents is fuelled by a justified sense that many who support the policy, and are likely the most vocal about it, are appalling hypocrites.

If we’re going to be financially punitive about private schooling, shouldn’t we be punitive about other educational choices enabled by fat purses?

Average people can afford private school fees if they choose to... especially if only for one child.

When we moved our daughter to a private school my income was around £28k and my partners similar and it was manageable and we were not the only ones in a similar position.

We now have 3 children there which costs a lot more and we do earn a lot more but still "normal" and similar to many of the other parents.

If we’re going to be financially punitive about private schooling, shouldn’t we be punitive about other educational choices enabled by fat purses?

That is what worries me, its not necessarily fat purses that pays for extra tuition for kids in state schools.
Millions of kids do swimming, gymastics, football and other sports lessons up and down the country, Millions do arts stuff, music, piano, guitar, singing, and dance.

The only stuff that would remain VAT free would be voluntary run.

The only stuff that would remain VAT free would be voluntary run.

Nothing stop voluntary run (like a universal benifit) subject to VAT too.

What do you mean?

Most voluntary run stuff like individual Scouts and football clubs wouldn't reach the VAT threshold that would force them to be VAT registered.

Individual piano teachers might also be below the threshold but a music school employing a couple of teachers would over the the threshold

Same with swimming most pools would be over it so you'd be paying vat on swimming

I meant voluntary aid or voluntary controlled state school (or academy) can be subject to VAT for the part of funding from the state too.

I don't know how academy schools are funded.

I was talking about extra curriculum stuff that millions of kids do, from maths tuition to swimming lessons. That would end up getting seen as luxury and vat slapped on top too.

People need to be very careful what they wish for. Currently all education is vat exempt. Start vat on some other things are sure to follow.

Regarding the point of education only luxury part as VAT. How come parent self funded private school teaching national curriculum type of education considered a luxury but state school teaching the same not considered as luxury?

Much as the VAT pains me, I still think the private education is worth it and I’m happy to pay it. Morally though, I think private school fees should come out of pre-tax salary.

The real inequality in this country is due to the ultra wealthy not paying their fair share.

Yes, the rich should pay their fair share. The PAYE earners already do. The non-doms, ultra wealthy and royal family don’t. Buckingham palace has about the same council tax as we do on a 3 bedroom property.

Neither party is going after the ultra wealthy or the royal family. Both parties treat PAYE earners as ATM machines every time they need to raise money.

Well we are done being treated like ATM machines. We won’t be able to afford sending our two kids to private school anymore, despite all our ‘wealth’. We will go the state -> grammar school route and supplement with tuition where needed.

Well I agree with that - the notion that the super rich ought be taxed more. The crazy thing is many millionaires want to pay more tax. Patriotic Millionaires has become a real movement. They're people who are proud to pay. They're lobbying Labour hard at the moment. Tories are a lost cause on many fronts!
A wealth tax would go a long way to helping bring up state education. Killing private schools with kindness might indeed be a side effect!

This post makes a very valid distinction between high income PAYE taxpayers who are supposedly 'wealthy' and are already contributing well over half their gross income to the state and the UHNW, who may well also well derive 'cash flow' rather than taxable income from such vehicles as a company entity (far lower corporation tax, company funded by directors loan capital which can be paid back tax free whenever required) or various other structures. There seems to be a rather naive lack of understanding by Labour and their supporters or supporters of VAT on school fee about the vast difference between the PAYE so called higher earner who pays a staggering amount of tax already yet who ends up with less that 50% of this themselves and the UHNW. They are two completely different things. It would seem rather fairer to increase tax paid by the UHNW/billionaire to improve state education, rather than slap VAT on school fees and disproportionately affect the PAYE earners.

‘Some families choose to spend thousands of pounds a year on smoking. Does that make them “rich”? You can’t describe someone as rich just because they spend their money on something you don’t agree with.’

wow, yes totally the same thing. I can see it now. So sending a kid to your average private Secondary equates to about 70 - 80 fags a DAY in cost.
So if all the poor people pissing their benefits away on fags, booze and, what’s the other thing? Oh yeah, Sky Sport subscriptions,
just knocked that on the head they could send at least one child to private.
Better than nowt.

Jesus Christ people. You’re going to have to pay fair taxes on this particular luxury.
suck it up buttercup/s.
You can ( mostly ) afford it. And for those who can’t, a normal education is still available to your little princelings.

Oh Lord, how is education a luxury, how is it fair? BTW, let's add more pressure to the state education.