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.

Lower middle classes don’t send their children to private schools in bursaries. 100% bursaries are rare as hens teeth. Many students may be “supported” by bursaries, but I doubt you’ll find many teachers who can afford to pay 90% of private fees. If you are so close that you can afford 90% but not 100%, then it’s a massive risk to send your kids anyway.

I also think when people say “I scrimp and save to send my kids to private school “ that their idea of scrimping and saving is most people’s idea of normal life. For example, I drive a Dacia and my holidays are in a caravan in Norfolk. That’s not me scrimping, that’s my life and I consider myself pretty fortunate in these times.

And please don’t give me the “i worked hard to get here” crap either. I’ve done decades of working shifts as a care assistant, followed by working my way through uni asa mater student, followed by 70 hour weeks as a teacher, and there are plenty of people earning less than me who have worked even harder.

If you are sending your kids to private school, you are not hard done by financially by any calculation at all.

Well I’m very confused having just heard Keir Starmer on the radio. He just said that he is not imposing VAT on school fees. He is making them pay VAT on things they purchase. And it will be up to the school if they need to increase fees to reflect that. Since 80% of costs are salaries which are not vatable, I am very confused as to what the potential outcome of this policy is.

Ok that staff part is interesting

So cross hearing this interview . Independent schools already pay VAT on what they purchase ( I know I am the person paying the suppliers) This policy requires them to charge VAT , yes they could reduce the fees so that the VAT inclusive amount is the same but this is unrealistic . Either he doesn’t understand his own policy or he is being deliberately obtuse to confuse the voters who mostly don’t understand arcane VAT rules.

@Notsuredontknow yes I did have an ultimate plan that if I couldn’t afford independent any more we’d opt for state. If you look further up the thread, you’ll see that I have been told i shouldn’t do that as it’s unfair that my children have been in the independent sector.

so I can’t afford to stay in private - but apparently neither should I opt for state. Not a woe is me, but a genuine - what did those people criticising me opting for state think I was going to do once I couldn’t afford private any more?

@cyclamenqueen yes very disingenuous it seems then.

According the the papers they have u turned on this.

Imagine if when you shopped at Aldi, there were buckets of water in all the corners where the roof leaked. Signage saying “caution, roof may collapse without warning” and “asbestos present”. If you got there and were sent home and told three bags of shopping per week would be delivered to your house and you would have to make do with it. If the checkout staff were pulled in off the street and had no idea how to work the tills.

At that point, perhaps we might have protests outside Waitrose.

Their inability to be clear is infuriating

Turn it all around and the argument goes that currently we're all subsidising private schools through the reliefs they get. Now that's definitely not fair.

The labour policy is a vote winner that guarantees I will not vote for them. It will reduce rather than increase access to the best state schools.

I pay the equivalent of £2k a month for my DD to attend a private school. She has SEN that means she benefits from smaller class sizes so i have prioritised private education over housing. If labour force private schools to charge VAT I will either keep her in the school and tighten my belt, so put less money into the economy, or take her out of the school and use the £2k a month to buy a house on the same road as the best state school in the area, private tuition and other enrichment activities to recreate her private education. The latter is actually the better option as DD will not be penalised for having a private education when applying for university or jobs. In fact, I suspect a lot of parents will be incentivised to move their kids to state schools for A levels to save some money and get the benefit of a state education when applying for universities.

Bit of a u turn going on, it's easy to say you are going to do this, that and the other when you are not likely to be in government, Ed Davey does this but if you are very likely to be the leader you have to think your policies very carefully

If I'm no longer paying school fees I'll be putting the money into my pension and claiming 40% tax relief.

@User19537876 ha ha yes, its almost like they hadn't actually researched their anti-private school policies prior to now isn't it 🤔

They will also have parents contributing £££ by standing order to the school every month which makes a huge difference to the school’s budget.

Love it 🤣🤣🤣

I disagree with the principle of taxing education. It should not be taxable.

But they don’t get VAT reliefs , this is a tax on the parents not on the schools . No problem with that but be honest

By that same principle, should education be a business that makes a profit?

That opens a whole can of worms.

So, can I open a private school where I charge parents VAT for core lessons from 9am to 12pm and then run a compulsory after-school care club that provides a range of sports and other activities that are excluded for VAT?

That's how private schools in Finland get round it after all.

More worryingly, Kier Starmer doesn't appear to know what his policy is... schools are already paying VAT on goods and services. But because they don't charge VAT to parents they can't claim the VAT back. So his new policy changes... nothing?

And if we rejoin the EU, then I expect we'll have to reverse the policy to fall back in line

Yes, of course they are private under another name. If all state schools are the same, how come some get 70+ into Oxbridge per year and some get none? Don’t be silly. Teachers are most certainly not working under the same conditions. In one school, they’re getting kids of professors who are highly engaged and in another they’re getting kids involved in county lines and all sorts. Not remotely comparable.

That's how private schools in Finland get round it after all

Finland, as part of EU will be bound by the no VAT on education ruling, so I don't think it can be applying tax to an exempt service in the way you describe.

More worryingly, Kier Starmer doesn't appear to know what his policy is... schools are already paying VAT on goods and services. But because they don't charge VAT to parents they can't claim the VAT back. So his new policy changes... nothing?

They appear to be dropping the proposal to change charity law. And instead making education subject to VAT. Which is something that schools will have to charge parents at whatever rate is chosen. Treatment of tax on the business side of running a school will continue in line with legal status of the organisation (charity or business)

I dont really see why not. I think food is essential but people make profit selling it, i think gas, electric, water are essential but again these are all for profit businesses. There are very few things not run for profit.

Unlike , isnt a pretty decent state alternative to drinking water, heating and gas.

But he literally just said on the radio that schools didn’t have to charge the VAT to parents.

which is not the case with VAT. You do need to charge vat if the law says so.

If he meant schools could opt to reduce base fees to charge parents the same overall having charged the vat (which incidentally would reduce the vat take as it would be say 18k plus vat rather than 29 plus vat, why not say that?