Page 19 | 20% vat on fees

namechangedforthisone35 · 2023-12-10T06:17:41+00:00

*IF* Labour get in and *IF* the 20% does get added to fees, how many private school pupils will be moved to state? I have three kids (one not school aged yet) and in private school. One of many reasons because I didn't want them in a class of 30. I couldn't afford the vat increase so would have to move them but then that class of 30 becomes, what, 40?! In an already strained and unresourced system?! Wwyd? Y - I'd have to move kids to state N - I'll pay the vat

Charlie2121 · 14/12/2023 22:20

jgw1 · 14/12/2023 22:07

Presumably the work that you will not be doing will need to be done by someone else who will be paid for it instead of you?

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More likely to be split between someone else in a similar situation which results in far less tax being paid.

76k income tax on single 200k salary. Only 54k in total on 2 x 100k.

That means 22k less tax for the Treasury plus both employees would get other tax payer funded benefits such as free childcare (earn £99,999). Add on the cost of funding the state school places for each and you’re looking at nearly 40k overall loss to the Treasury every year even if each only has 1 child.

carlydiamond · 14/12/2023 22:26

IHateWasps · 10/12/2023 08:08

We're really Joe Very Average.

You're really not when you can afford to send two children(then three) to private school even with a staff discount. Do you honestly think that your average family can afford to do that?

While I hear so many people on a similar income who prioritise an extension/conservatory/ new BMW/ holiday to Disneyland say they'd love to send their child to Independent School.

jgw1 · 14/12/2023 22:28

Charlie2121 · 14/12/2023 22:20

More likely to be split between someone else in a similar situation which results in far less tax being paid.

76k income tax on single 200k salary. Only 54k in total on 2 x 100k.

That means 22k less tax for the Treasury plus both employees would get other tax payer funded benefits such as free childcare (earn £99,999). Add on the cost of funding the state school places for each and you’re looking at nearly 40k overall loss to the Treasury every year even if each only has 1 child.

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So if you did less work two people would be better off?

Charlie2121 · 14/12/2023 22:49

jgw1 · 14/12/2023 22:28

So if you did less work two people would be better off?

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If I worked PT and did a 50/50 job share in my current role I’d take home 67% of my pay. As it is I only keep about 58%.

Both me and the job share person would be earning more in terms of take home pay on a pro rata basis. That shortfall has to be funded by other tax payers.

YireosDodeAver · 14/12/2023 23:23

@SheilaFentiman I don't think comparing other countries is that helpful, is it? Having a quick squiz at Germany, for philosophical reasons, private schools there aren't allowed to make a profit. Systems are probably so different that they aren't comparable.

The private schools in this country that are charities are not allowed to make a profit either, but there are private schools that are profit-making too. It would be interesting if the VAT regime differentiated between these.

LittleBearPad · 14/12/2023 23:49

Charlie2121 · 14/12/2023 22:49

If I worked PT and did a 50/50 job share in my current role I’d take home 67% of my pay. As it is I only keep about 58%.

Both me and the job share person would be earning more in terms of take home pay on a pro rata basis. That shortfall has to be funded by other tax payers.

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Excellent. You’ll have more disposable income to buy things like private school fees

Charlie2121 · 14/12/2023 23:49

YireosDodeAver · 14/12/2023 23:23

@SheilaFentiman I don't think comparing other countries is that helpful, is it? Having a quick squiz at Germany, for philosophical reasons, private schools there aren't allowed to make a profit. Systems are probably so different that they aren't comparable.

The private schools in this country that are charities are not allowed to make a profit either, but there are private schools that are profit-making too. It would be interesting if the VAT regime differentiated between these.

Germany actually gives you tax relief if you use private schools as they recognise you are easing the burden on the state. It’s a stark contrast to the awful politics Labour favours in the UK.

Araminta1003 · 15/12/2023 09:29

England is fine if you have assets or are going to inherit and also have a good professional career.

However, if you have no assets/inheritance coming but high earning potential then Dubai (zero income tax now I think) plus places like Singapore (22 per cent tax rate) are going to be better for you. Cost of living is high but private education is good, you keep more money and you can get help with younger DCs.

As I see young people every day in the no assets category but income potential leaving precisely for this reason, I think @jgw1 and @LittleBearPad live in cloud cuckoo land. It is doctors, lawyers, accountants, bankers wanting children/with young children leaving every day. It is an actual fact. The Goverment of whatever colour should be incentivising this lot to have kids not the opposite. Private school is only part of that equation but it is a symptom of what is going on generally.

EasternStandard · 15/12/2023 09:33

Charlie2121 · 14/12/2023 23:49

Germany actually gives you tax relief if you use private schools as they recognise you are easing the burden on the state. It’s a stark contrast to the awful politics Labour favours in the UK.

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Yes we had that, for health insurance too. It gets more disposable income into healthcare and education overall and decreases burden on the state as you say

Kokeshi123 · 15/12/2023 09:38

I know a couple of people who've lived or taught in Dubai. The standard of education at the international schools there really isn't that great and is certainly not at the level of a selective London private school - and to be honest, this is par for the course for most international schools worldwide. The tax level is very favorable, of course, but competitive "lifestyle inflation" is an issue.

Judging from this, I'm not the only one who's skeptical about Dubai schools' quality.

jgw1 · 15/12/2023 09:50

Araminta1003 · 15/12/2023 09:29

England is fine if you have assets or are going to inherit and also have a good professional career.

However, if you have no assets/inheritance coming but high earning potential then Dubai (zero income tax now I think) plus places like Singapore (22 per cent tax rate) are going to be better for you. Cost of living is high but private education is good, you keep more money and you can get help with younger DCs.

As I see young people every day in the no assets category but income potential leaving precisely for this reason, I think @jgw1 and @LittleBearPad live in cloud cuckoo land. It is doctors, lawyers, accountants, bankers wanting children/with young children leaving every day. It is an actual fact. The Goverment of whatever colour should be incentivising this lot to have kids not the opposite. Private school is only part of that equation but it is a symptom of what is going on generally.

If the doctors, lawyers, accountants and bankers are doing jobs that need doing, then when they leave to go to Dubai, someone else will be employed to do that job, so what is the problem if the UK loses a few people who lack social responsibility?

I take it you are in favour of allowing people to migrate whenever they want to?

Araminta1003 · 15/12/2023 09:56

@Kokeshi123 “I know a couple of people who've lived or taught in Dubai. The standard of education at the international schools there really isn't that great and is certainly not at the level of a selective London private school - and to be honest, this is par for the course for most international schools worldwide. The tax level is very favorable, of course, but competitive "lifestyle inflation" is an issue.

Judging from this, I'm not the only one who's skeptical about Dubai schools' quality.”

Sure, but if the teachers from good private schools in the UK end up leaving to go there and so will the peer group and leadership both Singapore and Dubai will become the education hubs. Things like orchestras/sports etc will improve quickly.

Araminta1003 · 15/12/2023 09:58

@jgw1 If the doctors, lawyers, accountants and bankers are doing jobs that need doing, then when they leave to go to Dubai, someone else will be employed to do that job, so what is the problem if the UK loses a few people who lack social responsibility?”

Well you know for a fact that that is not the case for doctors. Bankers/lawyers feed each other and create wealth. If there is a big exodus, no their jobs are not replaced in the way you may think, far from it. Look at the huge value drop in British companies over the last 10 years and the decrease in the pound. We should be absolutely doing everything we can to keep the professional talent in the country.

user1497207191 · 15/12/2023 10:02

Araminta1003 · 15/12/2023 09:58

@jgw1 If the doctors, lawyers, accountants and bankers are doing jobs that need doing, then when they leave to go to Dubai, someone else will be employed to do that job, so what is the problem if the UK loses a few people who lack social responsibility?”

Well you know for a fact that that is not the case for doctors. Bankers/lawyers feed each other and create wealth. If there is a big exodus, no their jobs are not replaced in the way you may think, far from it. Look at the huge value drop in British companies over the last 10 years and the decrease in the pound. We should be absolutely doing everything we can to keep the professional talent in the country.

I agree with Araminta. The "professionals" who've moved abroad are mostly working for rich clients who've also moved abroad in the expat community. Just like there are lots of British accountants living in Spain and Portugal doing accounts/tax returns for expats living there! A couple of my "professional" clients who are currently living in New Zealand (Actuary) and Spain (Mergers and Aquisitions consultant) aren't working for local NewZealanders or Spaniards - they're working for expats and UK firms!

jgw1 · 15/12/2023 10:02

Araminta1003 · 15/12/2023 09:58

@jgw1 If the doctors, lawyers, accountants and bankers are doing jobs that need doing, then when they leave to go to Dubai, someone else will be employed to do that job, so what is the problem if the UK loses a few people who lack social responsibility?”

Well you know for a fact that that is not the case for doctors. Bankers/lawyers feed each other and create wealth. If there is a big exodus, no their jobs are not replaced in the way you may think, far from it. Look at the huge value drop in British companies over the last 10 years and the decrease in the pound. We should be absolutely doing everything we can to keep the professional talent in the country.

So I think what you are saying is that they are not actually doing jobs that needed doing, so no great loss then?

Charlie2121 · 15/12/2023 10:03

“Lack social responsibility”

The incessant attack on the high earning minority who are bankrolling the majority is staggering.

Maybe if more made the effort to become net contributors we wouldn’t have such issues.

It is bizarre that not only is more not done to embrace the top end contributors instead they are invariably attacked and accused of not doing their bit. Our household pays way over 100k contributions every year and don’t avoid a penny of income tax. Most countries would do everything they could to retain such individuals. Unfortunately the UK has developed a huge victim culture where success is often frowned upon and deemed to be unfair. Much easier for people to moan about inequality than it is to put in the effort to improve their own circumstances.

Covid made things worse as many seem to believe free money is available and appear to have no concept of where that comes from.

Any economy with so few funding so many is always going to have problems.

EasternStandard · 15/12/2023 10:05

Charlie2121 · 15/12/2023 10:03

“Lack social responsibility”

The incessant attack on the high earning minority who are bankrolling the majority is staggering.

Maybe if more made the effort to become net contributors we wouldn’t have such issues.

It is bizarre that not only is more not done to embrace the top end contributors instead they are invariably attacked and accused of not doing their bit. Our household pays way over 100k contributions every year and don’t avoid a penny of income tax. Most countries would do everything they could to retain such individuals. Unfortunately the UK has developed a huge victim culture where success is often frowned upon and deemed to be unfair. Much easier for people to moan about inequality than it is to put in the effort to improve their own circumstances.

Covid made things worse as many seem to believe free money is available and appear to have no concept of where that comes from.

Any economy with so few funding so many is always going to have problems.

Pp forget someone has to pay the tax burden

Maybe they’ll pick it up when anyone who’s higher earning has been driven away

Charlie2121 · 15/12/2023 10:05

jgw1 · 15/12/2023 10:02

So I think what you are saying is that they are not actually doing jobs that needed doing, so no great loss then?

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Total lack of understanding by you.

In many cases employers soon realise nobody wants to do the jobs under the current UK tax structure so they move many of them overseas and all tax revenue for the UK is lost.

user1497207191 · 15/12/2023 10:05

jgw1 · 15/12/2023 10:02

So I think what you are saying is that they are not actually doing jobs that needed doing, so no great loss then?

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Are you being deliberately obtuse. The work needs doing, it's being done, just that the tax paid on it now goes to a foreign government instead of the UK.

IR35 has caused untold damage, because a number of British IT consultants who used to work for British firms are now living abroad, but still working for the same British firms, but instead of paying their taxes to HMRC, they're now paying them to the Spanish/Portugese tax authorities. That's a real, tangible, loss of tax to HMRC.

You could say the same of coffee chains. No one "needs" to buy a coffee, but people do, and it's best if British workers make the coffee and pay tax to HMRC. It's not essential, but it benefits the UK! Like most of the service industry really!

Araminta1003 · 15/12/2023 10:14

@Charlie2121 ”Most countries would do everything they could to retain such individuals.”

I agree which leaves you with 2 choices a) move overseas where you are wanted and respected and b) buy a house in catchment of a state school now whilst the market is sluggish, because you can make a tax free bomb that way.

The system is what it is and you have to work out how to work within it in the interests of yourself. Because there is no “social responsibility” towards you aka the professional middle class PAYE tax payer carrying the whole country, elite at the top, and those struggling below.

Araminta1003 · 15/12/2023 10:21

We are having to pay our newly qualified solicitors £125000 now and they are losing so much of it in tax (highest marginal tax rate). Out in Dubai if they pay them £90000 they are as well off as getting £200,000 here. So some of the jobs move to Dubai and the contracts are written there and business is conducted through there. That is the reality on the ground. HMRC absolutely will lose out and so will the vulnerable in the country. But keep digging your litte head in the sand @jgw1

Dubai is raking in the cash now.

jgw1 · 15/12/2023 10:25

user1497207191 · 15/12/2023 10:05

Are you being deliberately obtuse. The work needs doing, it's being done, just that the tax paid on it now goes to a foreign government instead of the UK.

IR35 has caused untold damage, because a number of British IT consultants who used to work for British firms are now living abroad, but still working for the same British firms, but instead of paying their taxes to HMRC, they're now paying them to the Spanish/Portugese tax authorities. That's a real, tangible, loss of tax to HMRC.

You could say the same of coffee chains. No one "needs" to buy a coffee, but people do, and it's best if British workers make the coffee and pay tax to HMRC. It's not essential, but it benefits the UK! Like most of the service industry really!

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I have never understood why people go out and buy coffees, why not just make one at home, much cheaper, or not have one at all. You are quite correct not the least bit essential.

Does one pay VAT on a Costa coffee?

Araminta1003 · 15/12/2023 10:25

And to clarify the NQ solicitors on 125k - no they are not swimming in it. They are working 12-14 hours a day, often 6 days a week, don’t take their all their holidays and a lot of it goes on rent and living costs in London and student debt! When it becomes unprofitable for businesses to stay in England they start moving their business abroad gradually. The English language and English contract law, for example, travels incredibly well. So does IT/tech/accounting etc. Our Government should be considering these aspects very carefully.

EasternStandard · 15/12/2023 10:26

I can see why other countries might welcome a reduction in higher tax payers in the U.K., if they’re eyeing up rebalancing power, but to wish it on yourself is pretty stupid.

jgw1 · 15/12/2023 10:29

Araminta1003 · 15/12/2023 10:25

And to clarify the NQ solicitors on 125k - no they are not swimming in it. They are working 12-14 hours a day, often 6 days a week, don’t take their all their holidays and a lot of it goes on rent and living costs in London and student debt! When it becomes unprofitable for businesses to stay in England they start moving their business abroad gradually. The English language and English contract law, for example, travels incredibly well. So does IT/tech/accounting etc. Our Government should be considering these aspects very carefully.

So you are telling me that someone who earns more than twice as much as me is not swimming in it, yet I can live a very comfortable life and save not inconsiderable amounts each month and am perfectly happy to pay VAT on any luxury purchases I might choose to make.