If labour win the election can they introduce VAT immediately?

[londonparent321]

(For school fees) Or do they need to go through the courts which could take years /never happen?

More than 5 I'd say, there seems to be more than 5 on this thread, but I'd say under 200.

No but very similar in status. That’s how they all do it!!!

But the justification often given for the no VAT is that they are charities and therefore do so much for the local community etc etc etc… no VAT is justified. It isn’t. It’s a tax break for the rich.

Nope, the argument is that education is intrinsically a social good, since it improves a member of society.

That's why you don't pay VAT on your DC's piano lessons or kumon, even though nobody benefits from them apart from your DC.

Do you see those as a tax break for you, at the expense of people who can't afford extracurriculars?

Then why don't any other countries tax education? Labour could be on a sticky wicket if they want to re-align with the EU, European countries aren't allowed to tax education because education is seem as beneficial for society.
For the millionth time, we pay our taxes (most are paying higher rate of tax) and we don't get a tax break for paying fees.

They’re too sensible to fall for this stuff

Ours built and gave a sports centre to the local community.
Wednesday afternoons teachers and older students work at local primaries
Obviously there’s the usual invites to schools to plays and lectures
All sports fields are used by local schools ( council sold off theirs for housing )
Music teachers give lessons for free at local schools
There presence according to their financial statements provide in excess of £2million a few years back to the local economy.

Plus they are educating children.

We ve been at two schools and the other does similar.

The people who mention VAT alongside charitable status are normally those who don’t understand it (often including mainstream media and some in the Labour Party).

Charitable status is entirely separate and, indeed, around half of private schools don’t currently have charitable status.

Not charging VAT on education is no more of a “tax break” than no VAT being charged on a loaf of bread in the supermarket.

At DS' school parents have been given the in option to pay the fees upfront to avoid the VAT.

The people with cash sitting in the bank have done this. One family has 3 kids so it's massive saving.

The parents paying out of income (the more hard up ones) can't and will therefore be affected by the VAT whereas the more well off ones won't.

So it's the parents who are just amount affording it that will probably leave and need state places.

It's not necessarily a massive saving at all, because it's entirely possible the VAT will fall due at the point of the delivery of the VAT-able service ie termly, at the start of each term (as that's the normal school billing cycle)

So the parents may still have to pay the VAT, but will find that they are locked in to staying with that school for however many terms/years they have paid for in advance.

Never sign up to this sort of arrangement unless you are sure you understand both the exit terms (if your DC leaves the school before the end of the period you have paid in advance) and the small print about who has to pay any new taxes or other levies

Quite an assumption to make, I’m raising a child with autism and ADHD… in private education. Quite happy to pay VAT to ensure he gets the best possible help. Why am I pathetic and jealous. Jealous of what?

I must admit I thought the VAT and charitable status were linked, interesting that they aren't. I wonder if schools do the stuff with state schools in the hope it would stop the VAT. Well it won't under Labour that's for sure. I would expect then that private schools will stop this since it will be costing them (read parents) money. I hope so anyway, mind you it's always been scoffed at on MN so it's not as if it will matter.

@makeanddo many of these schools were founded as charities 100s of years ago, charitable status has nothing to do with labour. My understanding is that requirements for sustaining charity status are not as straightforward as performing x,y,z services, and certainly people will have different opinions on what is ‘worthy’, but as long as schools are meeting the legal requirements you can’t really complain? Or you can lobby for a change in rules that could apply across all charitable organisations?

Agree @Labraradabrador
I think determining the legalities for each school will be a nightmare.
Kings Canterbury was set up as a monastic school for Canterbury in 597AD by St Augustine and then renamed by Henry viii and gaining royal charter. It has always run as a charitable establishment. Kings Rochester set up in 604AD much the same along with many that followed centuries ago. The schools receive endowments as they are charities and many of their buildings were gifted to them as they are charities many centuries ago. many schools only retain those whilst they are charities based on the wills of those that gave them and they were gifted for the sole purpose of education.

Taking away charitable status isn’t as simple as some may think
Taxing them but not taking away charitable status may seem easier but then all charities will have to also be taxed
Taxing just private education and not touching other charities will affect more than just the schools. It will affect all private tuition, nurseries, Christmas Easter and Summer revision courses,special sen schools, music and dance schools. It will affect private schools for those who live on Scottish islands ( for eggs) who have no access to senior schools and have to board. It will affect the children of the armed forces, churches and missionaries as well. The bills for some are met by the tax payer either in full or part and so the costs start rising even before the Government pays their lawyers fees.

It will probably be in their first Budget, so there will be a King's Speech as soon as Parliament returns after the election & then an Autumn statement if the election is in the summer or King's Speech & Budget in March if the Tories cling on, call election December, vote early January.

The money raised would be spent on breakfast & after school clubs & for all primary school children to get free school meals.

I can see parents will simply pay a lot of their fees as a charitable donation. Then the school can claim gift aid on this
Thus reducing the actual fees and the tax on those.
Due to gift aid received back from hmrc the fees need not necessarily rise.

As Labour are not looking at taking away charitable status ( well not at the moment anyway ) there is nothing illegal with doing this.

Meanwhile hmrc will have their work cut out calculating the tax owed. It’s not as simple as just how much a school receives in fees. I doubt they’ll benefit much at all with all the schools surviving on huge donations instead.

All those using revision courses will see increases in the fees too.
Plus grammar crammers etc
Private tuition and specialist music etc schools.
If all private education is to be taxed then Labour won’t be able to discriminate.
Think this will hit a lot more people than some may think. Especially as private schools are charities so they can, as PPs have mentioned, be partly paid through donations. So really it’s the non charitable tuition that will increase in cost, relatively speaking, the most. Oh the irony!

What next I wonder. A party that taxes education can basically run rough shot over whatever they like.

Wonder if they’ll introduce the period tax too.

If the school is a charity it’s perfectly legal to pay part as a donation. I believe there’s an upper % limit but it’s quite high.

I can see parents will simply pay a lot of their fees as a charitable donation. Then the school can claim gift aid on this

no they cannot do this as you cannot claim gift aid where a service is received by the donor. This is specifically dealt with in the gift aid legislation.

@pootleq5
It can be claimed back for the use of buildings ( for example) just as the NT can do.
The heads assoc of independent schools have been looking at the legalities for a long time.
Do you really think they haven’t worked through all the possibilities with their legal teams.
The above is only the tip of the iceberg.

They already claim gift aid on part of the fees paid if the parents pay tax.

Can you back that up at all?

My DD's school has never asked me to sign a gift aid declaration. (Every gift aid claim must be backed by a gift aid declaration where the giver declares they pay enough tax to cover the gift aid claimed back)

Here are the guidelines for gift aid: https://www.gov.uk/government/publications/charities-detailed-guidance-notes/chapter-3-gift-aid

The rules are pretty clear that payments to a charity in return for services, rights or goods are not gifts to charity and so are not eligible for the Gift Aid Scheme. And explicit that this means that payment of school fees for a specific person is excluded.

It also goes into some details about when state schools may or may not claim gift aid on donations given by parents to cover an extracurricular trip, since the school isn't allowed to charge for educational trips within school time. Perhaps that's what you're confusing it with?

It reads to me that is only open to state schools though, and I've never seen it at DD's school. We cover the full cost of the trips out of already taxed income, as you would expect.

@Barquentine and @OOBetty - that would be in breach of the rules for gift aid. Advice has been pretty clear that this is not an avenue to avoid the VAT.