If you have kids in private education, what is your school planning to do re VAT?

[Ladychaise]

I have two kids at a London independent school and currently just about scrape the cost of fees. Labour’s intention to add 20percent on the fees would make it impossible to keep them there, if all that cost goes to us - it is a worrying time.

The school’s bursar is being lovely but it’s very much a ‘let’s cross that bridge when we come to it’ take on it! I get that we don’t know for certain if Labour will get in or how fast they will implement this - but surely schools should be planning for this and working out how much of the VAT, if any, will be ‘covered’ by the school?

Aware there is a lot of uncertainty but does anyone else’s school have a plan in place? Thanks so much

Labour has a history of championing politics of envy. Quite often whilst availing themselves of the best.

People ARE interested in this issue, and want to learn more. Proof: We are getting regular media requests from national outlets to share stories and perspectives. We have Telegraph, The Sunday Times and iNews all looking at this -- and want to be informed on progress. Once these outlets get a real grip on the issue it will follow thar other outlets will also. Talk TV ran a full segment the other day on the VAT policy. It is slowly getting more airtime.

You are correct and incorrect stating that there will be little inpact on state schools.
There's a subtle point in the ASI paper, again breaking down the stereotype (poor poor state schools). Reality is some state schools do very nicely and are heavily oversubscribed. "More" highly able / motivated families in those schools makes no difference except to intensify competition and displace others.

In "weaker" state schools, what's the evidence that an able/motivated child/family raises the game? None. Let alone enought to justify the harm to that child by displacing them from their current school. Just putting another child into a weak setting helps nobody.
We know that the premise is flawed and they will lose money, overburden state schools and potentially illegally impact people with protected characteristics (SEN kids already dealing with a broken system as Labour themselves acknowledge).

I hear you and I think we want to achieve the same thing - equal access for everyone. Very unfortunately I think that it is almost impossible. I can’t think of a major economy where the bottom quartile has similar opportunities with the top. It would already be great for the UK if the majority (say >50% for the sake of this discussion) have similar opportunities / access. Sorry to have such a low bar but that to me seems like a more practical way to get to a more equal society than to narrow it down to top 3% (again, a number used just for discussion) via VAT on school fees and hope that this system will be dismantled somehow (and how exactly?).

If they really believed in this policy on its merits they would phase it in, allowing parents and schools to adapt financially to meet VAT or time a school move in a way that minimised disruption for the child. Threats to impose it (whatever ‘it’ is) retrospectively make it seem more like a ‘gotcha’ class warfare move aimed at levelling a hit before anyone can adapt.

Agree. The amount of disruption this will cause to so many children, both in the private and state sector and the teachers in each is unprecedented. I’m not fully against the policy as a principle but it has to be rolled out in a strategic and sensible way, not penalising those who have already entered into contracts. It’s like retrospectively adding 20% stamp duty to a house 5 years after it’s been purchased.

I’d vote Labour were it not for this policy.

It is like inheritance tax - only 10% of estates pay it so most people are not worried - plenty don't own a property and anyway are nowhere near the IHT limit. It is similar for school fees

. However Labour is not proposing to get rid of charitable status and it will also find it complicated to decide which bit of a bill is subject to the VAT eg is the hotel element of a boarding school (which is about half the fees) subject to VAT or just the education part?

In the health sector for example there is a VAT exemption for those providing welfare services such as care homes and no VAT charged to the client where the home is, as is usual, registered - VAT Notice 701/2. I am not sure about staying in private hospitals to recover after an operation - is that treated like a hotel type stay with VAT or a medical service? Anyway it can be very hard to draw these things up so it might be a while before Labour manage it

Xenia
I think you're right about why people don't care and I suspect many of them haven't thought about the big picture.

At the moment large chains are running SEN schools for profit and the fees are extortionate to ensure lots of profit is made from taxpayers. If local government had been able to expand SEN services when it was needed then all the taxpayer money that's currently lining the pockets at the top could either be used to provide more educational places or be invested into other services.

I think education is where it is by design. Labour need to change the design, not chase headlines by playing families off against each other.

I feel we are deluding ourselves thinking there is widespread interest on this issue or will be if only people understood the policy better.

Some newspapers maybe interested, especially the Telegraph, which seem to have a strong preference for the status quo (and an obvious anti-Labour editorial position)

But vast majority of public don't even think of it.

The only survey on this from YouGov in January shows a clear preference for the policy (62% support, vs 21% oppose). https://d3nkl3psvxxpe9.cloudfront.net/documents/Results_PrivateSchoolVAT_Jan24_clean.pdf

And it is broadly cross-party. Even majority of Conservative party voters support it (54% vs 30%) with much stronger support among Labour and Lib dems.

It also feels a bit patronising to say nearly two third voters support this motivated by 'politics of envy' or they do not understand the impact the policy is going to have on their lives.

Most people support it because they, correctly I think, perceive that it will raise some revenue without affecting them.

For example, house prices are already very high near most good state schools, and vast majority of parents who can't afford have resigned themselves to the situation long time ago. Marginal effect of, say, hypoethtical 10% or so, more buyers arriving in the area to lift prices up further isn't going to dramatically alter the situation for existing state school parents.

But it will be great if private school parents can influence the policy details by providing valuable input, lobbying, publicising its impact etc to minmise the harm to them.

@justanotherdaduser I broadly agree with what you are saying hence lobbying Conservative MPs as well as Labour. At the moment the Tory stance is to ignore the debate as they think it will produce accusations of elitism however this is something we are speaking to Tory MPs about. There are such holes in Labour's plan that the Tories could quite easily pick the finances apart without having to directly oppose it.

I have one in private and one in state, I’m just about able to afford that and doing it as child has mild sen and state has such low expectations I moved him out. State options mid year, mid way the secondary are very limited.

i work in state. I am in favour of labours plans, we will find additional money if needed (will remortgage if needed). State is a mess, teacher shortage but also shortage of support for kids with behaviour issues specifically, my school is under subscribed and we’re being asked to take kids with needs we can’t meet with complex needs because there’s no specialist provision available. It’s so difficult, the workload is unreal when you’re teaching kids with a broad spectrum of needs and you don’t have the workforce to support that. It’s expensive, but not meeting these kids needs will cost society far more in the long term.

i don’t think it’s just money, but curriculum design that needs to be addressed. High stakes terminal exams that are effectively memory tests aren’t inclusive and in the age of the internet I wonder how useful they are even to high achieving students.

justanotherdaduser
I think the fact that a lot of people assume it doesn't affect them, it's just going to pull the toffs in line, anyone who can afford private can suck up more rises and then support a policy based on that shows they've probably not thought about it very much.

You say yourself we're deluding ourselves if we think there's widespread interest in the issue. That's a lot of people having an opinion on an issue that they're not that interested in. It's a policy that sounds good, people who aren't affected will nod along with because it sounds good. Years ago I'd probably have done the same.

I don't think everyone should be interested to be honest. If it weren't for being a teacher, I'd probably not be as interested as I am. I'd have been happier if Labour had taken their time and come up with a decent, well-considered policy on education than the approach they've taken.

The issue is that many people (i.e. the general public) are only properly interested in things that they perceive to either adversely affect or benefit them directly. The way I see this situation that you have a minority of independent school parents with passion and vested interest on one side, another group who feel just as strongly in support of the principle of the policy on the other and a whole lot of apathy in between.

I think part of the issue in public perception is that private school parents are viewed as one homogenous bunch when the reality is very different. Specialist SEN independent schools, whose pupils have effectively been failed by the state sector, should most definitely be VAT exempt. I also think it is not widely appreciated just how bad (and potentially dangerous) the state offering is in some geographic areas, particularly in inner cities, with stabbings in schools etc. I would also hope that in an era where attitudes to mental health issues are improving that people could at least sympathise with families who have had to move their DC to the private sector due to bullying etc.

As I said before I don't think lobbying will massively turn the tide of public opinion but I agree that effective lobbying could influence some of the detail of it and potentially soften the blow somewhat.

I don't think it's the case that people are only interested in things that affect them directly. I no longer have school aged dc, so no personal axe to grind, but I do care deeply about the education of the next generation, I volunteer as a school governor and as a young person's mentor etc.

Of course, I don't want your children's education to be unnecessarily disrupted - they are just innocent kids, after all - but ultimately, it's about priorities. I am far more concerned about the life opportunities that we are providing for children from disadvantaged backgrounds and even for children from average backgrounds than I am about the prospects for your children, who are fortunate enough to have engaged, motivated and proactive parents with the resources to support them. I think most people would agree that this issue isn't that high on their priority list, not because it doesn't affect them directly, but simply because there are far bigger problems to solve and far more serious injustices to address.

And I know that some of you may come back with the argument that this policy will have a detrimental impact on the state sector as well, but I am yet to be persuaded of this. And being really honest, I'm yet to be convinced that this is your main reason for objecting to the policy.

Whether it will actually deliver any significant benefits remains to be seen. Personally, I think it will be a drop in the ocean, and the Labour Party is going to need to come up with a whole lot more than this to make a tangible difference to the life chances of the most disadvantaged. But as part of a wider package of measures, I think this is probably the right thing to do.

@Medschoolmum I no longer have DC in school and like you I do care about education generally and particularly about disadvantaged DC. I too am active in various professional mentoring and widening participation initiatives despite my own DC being privileged in their education and background. It is anecdotal but among the wide group of parents I know, whilst many are decent people who are sympathetic to DC with challenging circumstances, they generally don't do much to help. Lives are busy and I don't judge that but I have noticed it. Also it is a well known fact that many people do vote with their own direct interests at heart. It is the same with lobbying and advocating for change. For the most part people are galvanised into action when something affects them directly. These are just facts of life as I see it.

Yes, many do vote with their own best interests - or at least, their perceived best interests - at the centre of their decision-making. I have no doubt that this is why we e end up with such incompetent governments.

But there are plenty of people who don't vote selfishly and consider what is in the best interests of society as a whole.

I think a good education system is in everyone’s interest and we’d do well to remember that children grow up and the future economy and crime rates are dependent upon not just how well schools function but also how divided society is. Inequality isn’t good for anyone and reducing that would be a huge benefit to the education sector. I know the reality is very complex, but having taught for 20 years I don’t think it’s ever been harder, I can’t impact homelessness or poverty or lack of access to medical care, but I absolutely see the effects of these things in school.

@Medschoolmum perhaps this quote from the Sunday Times might persuade you of the state sector impact fees rising by 20% would have:

A survey of 750 parents with children in private education, carried out for Killik, found 28 per cent have signed up to pay fees in advance. Some 27 per cent are considering switching from boarding to day school and 23 per cent have decided to move to state schools.

Those parents, you could suggest, would now move to ensure proximity to (already over-subscribed) outstanding schools, reinforcing geographic inequalities across the board. Creating a second type of tiered system which currently I believe you can see in London. Where you live = your education opportunities, seems less fair.

No, it doesn't convince me of anything.

Re the 23% who have apparently already decided to move. Some private parents would switch to state anyway. Lots do. Some because they realise that that aren't getting great value for money in private. Some because their kids aren't happy in a particular school. Some because their financial circumstances have changed. Some because they believe that it will help them to game the system for university entrance etc. There has always been movement between the sectors in both directions. With the CoL crisis and rising school fees, it is hardly surprising if this goes up a bit further. But I suspect that a proportion of that 23% may just be making a noise, and when push comes to shove, they won't be going anywhere.

Re the 27% who say that they are "considering" switching from boarding schools to day schools... sounds like a good call. I'm not a fan of boarding schools in any case.

And re the 28% who plan to dodge the tax by paying upfront. Yes, it's a shame that some very wealthy people will do anything to avoid paying tax but that's a fact of life, and this particular dodge is just a transitional issue that won't be a problem in the longer term, so not a reason for not implementing the policy in my view.

I do not think politicians seem to understand the lengths many parents are willing to go for their children’s education.

All hell would freeze over before I or 95 per cent of my friends and colleagues would have sent their children to a bad school. Bad includes schools with significant social problems and teachers who are not that intelligent/significant staffing issues. I would not let my children waste their childhood sitting around aimlessly. They can access amazing online resources now anyway (thinking of things like Dr Frost Maths, Seneca etc, even Atom Learning). All these platforms are thriving now and quite a recent development.

So it was always going to be a top performing comp with proper setting, a grammar school or a selective private school, if those options are taken off the table I think I would have moved country or done online schooling. It would be quite easy to set up cheap and high quality online schools out of places like India with small classes and phd tutors. And have international summer camp meet ups and leave extra curriculars to parents in U.K.

The educational landscape has changed massively since Covid and online tutoring so I think a step back like this is crazy. People need to have choices and options in both the state and private sector. The state sector needs improving and funding. This cheap distraction will not work and harm the country as a whole.

That's not going to impact many then 😂 (only 1% of kids that go to private school get it free and 7% some discount. Bearing in mind many of these are also the children of teachers.)
Although I am totally in favor of schools not being charitable given the above I hope that the tax changes aren't brought in immediately, so that parents with children currently at the school have some time to make alternative plans/save the money.

It won't harm the country. Only 5% of kids go to private school, of that only about 25% (I saw estimated) wil drop out if prices rise. That's 1.25% of children having to go to the schools that 95% of children go to. Their parents will also be able to afford private tutors etc if wanted.

Actually by 6th form it is 18% of kids who are in private schools

Most of these will still be able to afford the price change.

People might have to tighten their purse strings but the impact on the state sector is being overstated. And frankly I doubt anyone in the state sector is that concerned, this seems to be a faux concern from parents with children at private school designed to hide that most people are worried about the change for more individualistic reasons.

I don't even understand all the hysteria about something that might not even be possible for Labour to get through that easily, I recall (due to my job) all the twists and turns as they tried it last time they were in power. Charity law is complex and I am out of the loop on the detail of how they are planning to achieve this but certainly last time round they never really found a way. They just, quite rightly, put pressure on all private schools that are charities to demonstrate a real material public benefit .

Biggest threat to private sector isn’t VAT, it’s great state schools. We have a really good 6th form offer in my county, there’s no way I’m paying for private 6th form. Schools local to my son’s indie have got much better in recent years (I don’t live in the catchment) and numbers have gone down in his school. The 6th form is tiny, which will attract some as all our state 6th options are large colleges. But clearly not many.

Obviously there’s a point where fees are too much, but if you look at the rise in school fees over the last 20 years its clear there’s some tolerance for increases at least in line with if not above inflation. Lots of schools are currently investing in their property and I’d imagine looking to offset this investment against tax when labour change the rules.