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?

I don’t know a huge amount about school funding, but I believe that the figure of over £5,000 is the local authority element.

From the government’s own website and statistics:

“On a per-pupil basis the total funding allocated to schools for 5-16 year old pupils, in cash terms, in 2024-25 was £7,690”. Primary school funding will lower, secondary will be higher. That’s 54% higher than the figure you quote.

You are incorrect in saying that even the cheapest private is £15,000 a year. From schoolguide.co.uk
“the majority of pupils attend day schools with an average fee of £5,218 per term which equates to £15,655 per year”. That’s the average. Plenty are below that amount. The average is dragged up by the very expensive school day fees.

Whilst that is still obviously higher than the state funding, your figures are misleading at best and exaggerate the disparity.

Private schools also have costs which state schools do not. For example, they cannot currently reclaim input VAT.

I think most private school parents would be happy to pay the VAT on fees if they got a credit for the £7,690 per year per child that they are saving the state by not using the state education system.

It won't have any impact overnight as many parenys will find the money in short term.

But for those starting year 7, lots of parents will choose state over private so the % of British kids in private schools will just decrease, the proportion of kids from overseas / Uber wealthy will just increase at the top schools

I think that implementing VAT on private schools will drive the cost of the school up.=> This will result in a drop in the applications to the private schools. => This will result in the fact that there will be more kids without secondary state school offers.
And we already have not enough schools. I doubt Labour would create a problem for themselves unless they ask the school to keep 35 pupils in the class.

Exactly this! Our school will close if we lose more than 10 pupils. There seems to be some sort of misconception that we're sitting here with pots of cash - this is wholly inaccurate. We're a small school offering an alternative type of education. And despite the lack of funding we still open up all of our somewhat limited facilities to local schools and the community. As for bursaries, these have recently been stopped because of the cost of living and VAT issues impacting funding!!

And I'm still confused as to what constitutes a "normal solicitor"? You have some extremely narrow, tunnel vision views.

@Another76543 ,

I don’t think I was misleading at all, as I mentioned the buildings. There are also additional funding streams for SEN and FSM, and schools do have some fund raising capacity (which is also left out of the private school income/pupil).

https://ifs.org.uk/articles/growing-gap-between-state-school-and-private-school-spending

Here is another link to an IFS study, this a matter of fact, not speculation.

As of 2020/2021, the average money per pupil across the uk including everything was 90% higher in private than state. As the report says, in England this gap is far higher.

And in the last 3 years, state schools have got virtually no additional income and private fees are up more than 20%- so now more than double.

Here is another link to an IFS study, this a matter of fact, not speculation.

Not particularly good facts considering they compare apples and pears in terms of regional spending.

They also acknowledge variation in fees within the private sector (England higher) but don’t break this down further - what is the distribution in cost of fees? If we exclude the ‘elite’ schools then what is the comparison between the rest.

However I see you have gone from stating private schools have three times the amount of funding as state schools to saying it is not quite double.

So why aren’t people putting their efforts into campaigning for an improved state sector rather than attacking the section of education which works well? The forecast VAT revenue is negligible and won’t solve this issue.

Because it is easier to try and bring everyone down to the same level than to increase standards across the board. A few people have referenced jealousy and privilege, and having read these threads I think there might be something in that as nobody has said anything which has convinced me that this is a good practical solution (and, in principle, I don't even object to it...it's about the practical impact of it for me).

You’re correct. I haven’t read a single comment which can justify how taxing the private sector will meaningfully improve the state sector. It’s always about “it’s unfair”, “they’re privileged”, “all children should have the same education”. It’s never about improving the state system. It’s always about harming the private sector. The easiest way to make sure more children use the state system is by improving it. Most parents aren’t paying tens of thousands of pounds for the fun of it.

The 7% who move could well make a contribution to the schools they end up at, both academically and financially, should the parents even donate a fraction of their current school fees to the state school.

As a parent who could have just about stretched to private fees, I use that money to replicate all the extra curriculars for my DD that she would get as part of the package at an independent but that have to be organised and paid for out of school in the state system (plus a fund that can be used for additional tutoring in the run up to GCSEs).

Parents who move to state will be doing exactly the same - using money saved to top up for their DC... they're not going to be writing £15k cheques to the state school.

Agree that a lot of selective private school candidates going state instead will also push up results in state schools - but you may well also find that the top sets become a rather more skewed demographic.

all children should have the same education

The state system is very far from offering the same education to children within the state system.

@Another76543 ,

‘So why aren’t people putting their efforts into campaigning for an improved state sector rather than attacking the section of education which works well? The forecast VAT revenue is negligible and won’t solve this issue’

I think this is such a glib and out-of-touch comment. First class and private jet travel also ‘work well’, it is not hard to provide a good product if you charge enough for it.

Firstly, the forecast VAT revenue is around a 2% boost to the education budget. This, for a school, could be a couple of TAs in a large difficult class or the ability to retain more senior teachers. When you have no money, every little bit really helps.

How do you campaign for a better state sector when those with power and influence opt out? Why would you care if it doesn’t affect your child? Most people, however hard they campaign, won’t make any difference at all. It is the same (to a lesser extent) with the NHS.

As I said before, it is just a tax, which most can well afford to pay, not an attack. Most people know taxes are about redistribution and generally know paying them is for the good of society. Would you rather the top rate of tax was raised again to 50%?

It will be interesting to see how much actual difference it makes to the sector. My bet is that it will continue to go from strength to strength.

If Labour were serious about funding education they would bring in a 1p on income tax ring fenced for education. This would bring in over 3 x the amount that VAT will and would be spread out evenly because the whole of society benefits from education. Even just adding it to higher rate tax payers would be more beneficial than VAT.
The estimate of 2% of the annual budget is a best case optimistic estimate when in reality once you take off VAT claimed back, behaviour change etc it will probably end up at around 1%. That won't cover mental health provision AND a raft of TAs or teachers.

That's my issue with it, that Labour aren't being honest about the intention behind it or the actual amount they expect to raise.

A PP said that VAT is Starmer's fox hunting bill. I agree.

Would you rather the top rate of tax was raised again to 50%?

This shows your lack of understanding around tax. A top rate of 50% is a punitive tax, not a fundraising one. Increasing the top rate this way reduced the total tax intake.

@twistyizzy ,

I disagree, though we shall see how it pans out.

Why do you want to hit the poorest with extra tax always, though, rather than 5p on the very top rate or a progressive housing tax? Or even higher inheritance tax on large estates? I have never understood why you can’t tax dead people a lot.

All you would do with a general rise is make more families go hungry or not heat their houses. Income tax comes in at ridiculously low levels of income.

The reality is income distribution has completely skewed in the last 30 years or so (look at our GINI coefficient) and you need a more progressive tax regime to counter this. You can’t see income distribution and fair tax rates as completely separate issues, convenient as that may be for you.

Completely beside the point but if you increase the top rate from 45 to 50% it'll cost me a lot less than the VAT on school fees!!! Completely irrelevant though - this is about practicalities! And actually, we're not the ones who will suffer the most because we'll be wealthy enough to "buy alternative privilege" - it's the people who will be priced out of catchment areas, specialist SEN provision etc.

@SaffronSpice ,

’punitive’?! My parents paid 90% in the seventies on some of their income. That is punitive….

I also said just a rise for the higher rate tax payers. I don't want to hit the poorest but it benefits everyone to have a properly funded education system, in fact it benefits the poorest most of all.

@Herecomesthesunshine83 ,

If it won’t affect you (and I can well afford it too if I choose to go private for my boys’ last few years, why are you so concerned about the few priced out of private school, rather than what is going on with state sector funding?

I was a governor and significant donor to a small state primary. It was a real joy to see how much difference a few thousand made.

‘grammars are selective and not by catchment area anyway’

This is not true
Ours all have catchment areas.

Your choice of example of first class plane travel is an interesting one as it’s not subject to VAT.

the forecast VAT revenue is around a 2% boost to the education budget

This isn’t correct. From IFS figures, the total public education budget is £116bn. IFS estimates on how much VAT on school fees would raise is around £1.3-£1.5bn. That’s just over 1% of the education budget -half the amount you are suggesting. The IFS figures also assume that every parent who moves out of the private sector spends every penny they would have spent on school fees on other goods and services subject to VAT at 20%. In reality, that won’t happen as parents are likely to spend any savings on foreign holidays/savings/pension contributions.

Would you rather the top rate of tax was raised again to 50%?

No, because I don’t think that the only alternative is, yet again, taxing the top few percent of the population even more. The previous introduction of 50% raised a fraction of the predicted amount (there are various reports on this, including from the OBR).

Benefit fraud amounts to several billion; multiples of the estimate revenues from VAT on school fees. An increase of just 1% in the standard rate of VAT would raise £7bn. Those figures are meaningful. Why is no one suggesting that? I suspect it’s because it’s not politically popular and a large proportion of the population are happy to call for increased state education funding, but only if someone else is paying for it. Achieving any meaningful funding increase requires a greater proportion of the population to pay more tax.

Given your privileged upbringing I am in no doubt you can afford it.

You appear to have misunderstood. Firstly, my view is this will have no practical impact on state provision given the behavioural changes. Secondly, the only ones affected will be those who can "just afford it"...not those with generational wealth such as yourself. Accordingly the wealth gap will just increase. Thirdly, I said we'd buy alternative privilege I.e. if we want, we'll buy another rental property in a good catchment area, we'll pay for extras etc ...I didn't say it do t affect us...I said we wouldn't "suffer the most".

Wow you must have felt extremely charitable and noble. What an altruistic move.

Your parents were indeed privileged to have been able to live of investments providing an income at the top rate of tax.

The top rate of income tax in the 1970s was 83% for those on an income of above around £144,000 in today’s money. And if we were to look at an example of a well run economy we wouldn’t look to the 1970s!

It will be interesting to see how much actual difference it makes to the sector. My bet is that it will continue to go from strength to strength

Newbutold Which sector? Do you mean the private sector will go from strength to strength or the extra funding from VAT on school fees will mean the state sector will go from strength to strength?

I doubt the ‘extra funding’ will make any difference whatsoever.

It will amount to nothing! any extras will be used to pay for additional students including SEN students, VAT claims by the schools who will be in a position to do so and should we see a reduction in private school places paying for those made redundant and reduced tax and ni payments by those reducing hours or giving up work as they no longer need to pay school fees.

Labour hasn’t looked into the financial impact because in so doing they would reveal a policy that provides nothing financially to the economy whilst also returning the schools into even more elite institutions.