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.

Are you really comparing a country with a population of under 6m to the whole of the U.K.?

More likely that:

a) Private schools will make efficiency savings (e.g. larger classes) so that the cost increase to parents is less than 20%. Some children will move from private to state, but some extra tax will be generated (by the remaining private pupils) to pay for this.

b) A few schools will close, but most teachers will not move abroad, because their families and lives are based in the UK. Some of these teachers will move to state schools (and may come to realise that some state schools are excellent and have very high standards of pupil behaviour).

One possible problem I can see is that increased numbers of potential private school parents will instead choose to buy a house in the catchment of a top performing state secondary (we did this), pushing up house prices in the area and thereby making it more difficult for middle/lower income families to buy or rent there.

A disgrace because we earn more and choose to spend it on our children’s education? Would it sit better with you if we bought cars and went shopping with it.

so short sighted. If this happens the state sector will have an influx of pupils when it can’t accommodate the ones it has.

45% of tax.... on a portion of your earnings.

Less on the £125k before that bracket kicks in.

OP - as a human being, you are in an incredibly privileged position, not just compared to others in the UK, but compared to people all over the world. You have access to more resources, better lifestyle and have the freedom to send your child to a fee paying school - something only a tiny percentage of people can do. And yet despite your incredibly lucky lifestyle, disproportionate share of resources (we are all human beings with the same needs - you have far more than others) and privileged material wealth, the issue in life which gives you a burning sense of injustice is this? Why not look at the hellish poverty experienced by millions and a better cause to get worked up about?

The typical arguement is you have EARNED your money, you 'deserve it' and should be free to spend it as you wish. Well, it's possible to some extent. However, luck gets you very far in life, decent life circumstances that have got you here. And it's also true to say that lots and lots of wealth is earned by unsavoury means. From businesses exploiting the lowest paid by making them work unpaid overtime to boost profits for those at the top (one tiny example), to being able to manage tax affairs and take professional advice to pay less - and much worse. So lots of wealth not 'deserved' - just those with more exploiting (at some level) those with less.

Yet there you are, bitterly feeling you somehow aren't getting your money's worth in life and angry at tax being paid by organisation which gives some children a much better education, simply because their parents can afford it.Selfish and greedy? I'd say so.

I'll be honest, I don't have a strong opinion either way on VAT on school fees, however, I am a bit confused by this point you made,

So we pay the most to fund state schools, but when it comes to state school admissions, we are last in line

state school admissions are based on catchment area if I recall correctly? But even if not and there is a different method, I still fail to see how anyone who can afford private schools would be unfairly treated in the state school application process?

This isn't me being obtuse either, I'm genuinely interested.

@DreamItDoIt Exactly. Scandinavian universities do not get applications from the best students in Singapore, Japan, Taiwan. uK universities do. Scandinavian companies do not advertise graduate recruitment programs in US universities. UK companies do. UK is an open market with competition from everywhere in the world. They are not shielded like Scandinavian countries are.

@Fleasbane yes, if people can keep bringing up Finnish utopia, why can’t I bring up Singapore?

Private schools will make efficiency savings (e.g. larger classes) so that the cost increase to parents is less than 20%. Some children will move from private to state, but some extra tax will be generated (by the remaining private pupils) to pay for this

That's a high-risk strategy. Because discovering that your school fees could have been lower would go down like a cup of cold sick. And I doubt that larger class sizes would be a draw for the families who can continue to afford the fees

I'm so tired of these threads from privileged posters moaning that the tiniest of their privileges might be taken away.

Let my find my tiny violin for you, OP.

My brother’s twin DC have just sat the grammar school exam, and will be going there if they get in. They had planned for independent schooling all the way through but the VAT threat was the final straw.

So it will now cost the government over £100,000 to educate their DC for the next 7 years.

Plus SIL is planning on going part time to manage the shorter school day and the twin’s out of school clubs. So reduced tax receipts for the government.

I am not sure that Labour have thought through the implications of this policy.

The policy has been dropped by Labour- so you got what you wanted OP

Story just posted on BBC news

Perhaps if more people in the UK were privately educated, they would see through these shortsighted, populist moves..

Oh, so those of us who are state educated are too dim to understand?

@Mulhollandmagoo It’s probably my misunderstanding / poor recollection. I last looked at state school admissions for our elder child in 2020 and I recall, perhaps incorrectly, that applications from kids whose parents were on benefits were higher in the overscription criteria, right up there with SEN kids. It might have been an Islington council thing, it might have been a Covid thing, or it might have been me mixing up admissions criteria with free school meals criteria

Why do you come on a thread spouting nonsense about something you clearly no nothing about?! Yes, it is a service but not all services attract VAT. Education is exempt from VAT. This includes private school fees, music lessons, swimming lessons, private day nurseries and preschools (almost all of them are private even the ones attached to state primary schools), tutors and university fees. Are you happy for VAT to be added to all of those services?

Charitable status has nothing to do with VAT. Plenty of private schools are not run as charities but they don’t charge VAT because educational services, whether they are provided by a charity, an individual or a business, are currently exempt from VAT.

All working adults fund state school, you’re not special.

private school is an expensive privilege, this means you can be priced out. Such as anything where you pay for exclusivity, lots of people find public school too expensive.

you’re not special on that either.

The policy has been dropped so no point contributing to the discussion now!

OP, you come across very uneducated. It worries me that you don’t understand why tech grows faster in certain countries. Also, Eastern Europe tech will blow your tiny little mind.

Ok, so part of the policy has been dropped as just announced. Shows you how much thought (or lack thereof) had gone into this. Which proves my point, politicians spout nonsense without thinking through the consequences.

They do pay tax . Currently they pay vAT on everything they purchase including millions on new capital buildings.

The labour proposal is not to make them pay VAT it’s to make them charge VAT. They will then be allowed to offset the VAT they have suffered against the VAT charged and pay over or reclaim the balance. Bizarrely the biggest , richest and most elitist schools will probably benefit financially from this as they will both be able to reclaim the VAT on their flashy buildings and their parent body will just pay up. This will have zero effect on the Eton, Rugby, or Westminster’s of this world rumour has it that they have been holding off big capex projects in the hope that this will come in whilst making sad faces in public. Note none of the protests are from the big schools.

in contrast the local rural ex grammar , small prep or SEN school doesn’t have the funds to build flashy buildings and the parent body can’t afford the increase so they are going to struggle.

No, they haven’t dropped it. They have admitted that charitable status and VAT are two separate things just like lots of posters on this site have been saying for months/years. Can’t believe it took the Labour Party so long to realise this…gives me confidence in their ability to run the country 🙄

No they haven't - they're just not going to remove charity status.

https://www.bbc.co.uk/news/uk-politics-66942985

BBC News - Labour drops plan to strip public schools of charitable status
https://www.bbc.co.uk/news/uk-politics-66942985

It hasn’t been dropped. The charitable status element has been dropped. The charging of VAT is entirely separate to this.

why are you scrimping & saving?