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

I may be really stupid, but if a parent pays for their children to be educated, doesn't that already save the powers that be the money that would be used to fund them through state schools anyway?

@Lilithlogic precisely plus we are still paying our taxes which go towards funding state schools, we are just choosing not to use them. So they get our taxes but don't have to fund our children.

Totally out of order then. Surely you should be due rebates if they get this through. I'm seriously beginning to believe that not one politician in this country has the sense they were born with.

I've heard of a few ways that a private school is partially trying to cover it. Finding alternative incomes like letting and opening schools in other countries. Not letting new teachers join the teachers pension and not giving payrises to people who remain in the teachers pension are also being used.

https://chng.it/jNtqvvRvfv

This is the petition to stop vat on fees doing the rounds. I'm not sure how effective these things are, but there is a lot of noise about this one. It's going round our village primary WhatsApp group and the local private parents groups by all accounts.

There are thousands of state school teachers signing this as well as private school parents etc.
In our extremely rural area, we only have two state seniors- both of which are stretched to breaking point. An influx of children from the local private is just not possible. We just done have enough schools where we are!

When they thought removing charitable status was the way to do it, it might have been a self-contained problem for private schools. But now they have realised that won't allow them to do what they wanted, so they're talking about adding VAT to all education to "get" the private schools. What they're not thinking of with this ridiculous new iteration of the policy is if they add VAT to education, it's not just going to hit private schools.

It will hit music lessons. Private tutors for children who are struggling. Swimming lessons. Football lessons. Ballet schools. Every single type of education not currently provided for by the state sector.

It's not only going to hit those with children in private schools.

And I think a lot more state school parents would be pushing back on this if they realised the extent that it's going to affect them and their children both indirectly (with the influx of ex-private kids into state schools with no additional promised funding to those state schools) and directly (paying 20% more on every ECA and activity they do with their children, including educational resources and subscriptions for using at home).

I don't know, but my daughter is in Year 9, so hoping it won't come in for another 3 years which will be after my daughter's GCSEs. 🤞🏻Then she'll go to to state sixth form.

I am hearing quite a bit about pre paying fees with a discount to avoid VAT - especially for senior school.

To be honest we would do this if our schools offer it but I am wary as not sure how this will impact the cash flow for schools over the next few years. Most schools have put fees up quite a bit this year so not sure how they can suddenly offer a discount to be honest.

I have said before it is the preps that are really going to be impacted. If you have children in senior you will probably pay the increase if at all possible but many will think very carefully about putting children into private from age 3 as we did.

Yes it does!

From the government website,
“On a per-pupil basis the total funding allocated to schools for 5-16 year old pupils, in cash terms, in 2023-24 was £7,460”

Assuming similar funding for sixth form, an education for a child for 14 years amounts to over £100,000. I cannot understand the logic of penalising a family through the tax system when they are saving the state over £100k per child.

I don’t think it’s a given that eg tutors would have to levy 20% VAT
What are schools’ rationales for already putting prices up as some have said they have done? I can’t get my head round that.

Only around half of independent schools are charities, just to correct something someone said upthread.

Best estimates do not suggest a massive outflow of pupils from independents - some but not loads, and an overall net benefit to exchequer of somewhere in the region of £1.3 Bn per annum, from memory. But that’s a broad uncertain estimate. It’s quite a lot of money to add to state school funding each year.

If my school was telling me that it would be passing on the whole 20% I’d be a bit hmmm about that.

I also don’t buy the argument that indie exiles will suck up grammar places that would otherwise have catered to poorer children. Grammars hardly take any disadvantaged kids now by and large, with a very small number of exceptions.

I personally think it is highly unlikely that VAT would be chargeable when the ‘customer’ is the local authority, ie a kid has an EHC plan but I could be wrong.

And state school pupil numbers are due to decline significantly by 2030 so unlikely to be physical capacity issues at least at the national level. Local areas may vary.

After a lot of speculation. DS’ school has brought a few ideas to the table for parents to discuss:

1. Giving children educated throughout their primary 30% off fees in Secondary.
2. Removing wide ranging academic burseries for State educated pupils but keeping them for STEM, sports and arts.
3. Raising bus costs
4. Waiving the entrance exam for students who are educated in their primary from preschool to year 6 (these children have a 100% pass rate for the exam - it’s children who start later who tend to fail).

There are other more radical things (like parents paying per subject and being invoiced directly by teachers) but they’re still being reviewed

@2jacqi This is misleading. Keir Starmer went to a state school that became fee paying while he was a student there. As far as I’m aware, he didn’t pay any fees.

I saw that this morning. I don’t understand this paragraph though

“Shadow Chancellor Rachel Reeves told The Telegraph that tax hikes won’t generate more money for public services, saying we had to “grow our way there”. This means no return of the 45p tax rate or the cap on bankers’ bonuses, but big taxes await working families who manage to send a child to private school despite Sir Keir Starmer’s promise not to increase the burden on working people.”

What do they mean by “no return of the 45p tax rate”? The 45p tax rate is still in place. In fact, the income level at which this becomes payable was reduced this year, catching even more people.

Surrey Council paid for his and other students (who got in before 1974) until O Levels. Afterwards Keir’s parents paid fees for his A Levels.

The problem is that the Labour Party and the mainstream media report it as only affecting those at private school. I think if people actually realised the unintended consequences, be that VAT on other activities or increased pressure on places at good state schools, they might be less keen on the idea.

It’s quite a lot of money to add to state school funding each year.

It’s around 1% of the overall state education spending, even using their optimistic figure. 1% won’t even scratch the surface of the state school problems. They’d raise far more money by clamping down on tax evasion (illegal) and benefit fraud. Unfortunately, they wouldn’t be quite as popular, headline grabbing, policies.

@Another76543 you would think that the VAT hadn't been thought through wouldn't you 😆?

Might sell one of my yachts.

@JustAMinutePleass as far as I know he had a bursary for 6th form.

I might sell my tiny violin.

Private school parents are not expected to split to Labour in any great number, presumably.

It's a high profile policy and has considerable public support.

Regardless of whether he paid for it, Starmer enjoyed the benefits of a private education, currently costing £23k a year. The Labour Party are full of people saying that we don’t want the country run by people who went to “posh” schools, and yet their own leader attended an independent school.

There another angle to this which I’ve not
seen anyone report on.
Almost every child I know at private school has two parents in pretty senior jobs in order to afford it.
The private schools facilitate this with longer school days, wraparound care etc.
If 20% price hike makes fees unaffordable for some of those families, or some of those smaller schools close due to pupil numbers dropping, I very much doubt all those families are going to carry on juggling two ‘big’ jobs once they’ve moved their kids to state and saved £30k plus out of post tax income - or be able to, with the reduced wraparound care. So likely one parent will step down to a part time/less high earning role. So not only are those families not going to be paying all this supposed extra VAT, but HMRC will be losing a big chunk of income tax also.
I can’t see how it makes money at all.

This is irrelevant, really.
The policy is either right, or wrong. We can debate that of course.

The fact remains Starmer's parents didn't pay for his education, he didn't grow up in a privileged household.