Vat Question????????

[Anoth]

Can I ask a silly question??
We have been given our school fees for 24/25 academic year now for the school my daughter attends.
My question is if labours policy comes in half way through an academic year will the schools be allowed to put the fees up for the remainder of that academic year? Eg if we start paying X amount on September and then labour get in and introduce the added vat in October. Will the fees go up in Jan of that academic year? Normally fees remain un changed for the whole of the academic year once fees have been published but I understand this is a strange situation!
Just wanted to know if I need to prepare to save more for 24/25 fees just in case or will these that are now published still remain until the end of July 25??.
Thanks!

In fact having rich private schools with charitable status is very good for society and HMRC because they are incentivised to spend and employee people and they will never evade tax being properly audited and having their staff on PAYE.
Once you change the structure and start incentivising private school “businesses” including foreign companies and offshoring, that will take cash and employment out of the country.

“Also considering nearly 50% of people say grandparents/ family are helping to pay the fees it would also depend on them agreeing to pay the parent to home school (as parent would need to give up job)”

Lots of grandparents pay school fees because if they don’t it will just go to inheritance tax when they die. It is just good tax planning. Instead those grandparents can fund the children’s tax free ISA accounts and pensions to set them up for later.
Educated and rich people will always find ways to deal with the situation. The losers will be those employed by private schools currently.

Some grandparents might offer to pay the VAT themselves. This has the benefit of saving their estates even more IHT on death. I don’t suppose the IFS figures include that either.

They've made it clear that the VAT will be on independent schools only. All independent schools are, by law, registered with the DfE so there isn't really any confusion here - all schools registered as independent schools with the DfE, and with a turnover of more than £85k a year, will need to register for VAT.

You can see what the criteria for registration are here: https://www.gov.uk/government/publications/independent-school-registration

Nurseries, universities, and all the other strawmen you've listed are not registered with the DfE as independent schools and therefore will not be affected.

I suspect they will zero-rate the VAT on special schools. Again, this is not complicated - after all, they manage to have different VAT rates on nuts, depending on whether they are shelled or unshelled.

OP: if the school has to VAT register halfway through the year then they will need to start accounting for VAT immediately. However they will only be able to pass the increases on to you if you have a contract with the school that permits them to raise the VAT mid-year.

Plenty of people have free childcare from GP. That is no different unless they charge you for looking after them.

Those of us who have no extended family support pay for every minute that someone looks after our children.

Well exactly my point, with most it would go down like a lead balloon.

So the percentage of people that could afford to give up work to home school is probably pretty small.

I suspect they will zero-rate the VAT on special schools. Again, this is not complicated - after all, they manage to have different VAT rates on nuts, depending on whether they are shelled or unshelled.

They have said that they will not do this because they think it will create a loophole that will be abused by independent schools. See Helen Hayes comments in this debate https://hansard.parliament.uk/commons/2024-02-21/debates/25893EE2-52BB-4F33-83AB-04B6FE18E522/IndependentSchoolFeesVAT

They are planning to exempt students with an EHCP instead but that also runs into a number of problems that have been covered on these threads, not least that the different nations of the UK use different systems and the EHCP is only used in England.

Yes of course.

But this was in reference to people suggesting that huge amounts of people will decide to home school as they won't be able to afford the fees anymore.

And apparently they will instead be able to afford to give up job to home school because they will be saving the money on fees.

My point is that for a lot of people it doesn't actually make financial sense to give up job to home school, especially if they're current salary isn't actually paying the school fees as it is.

No one said huge numbers will home school, just that some will. Some will pay the increased fees (sometimes with help from family), others will switch to state, others will home school. There’ll be a mixture.

I think the numbers of people who - can't afford the increased fees (with or without family help), but yet can afford to give up work to home school will be pretty small.

@Mia85 ah, thanks for the clarification.

Also it was implicit in what the poster said that they thought a large number of people would do the same. Because if it's just a small amount the government really aren't going to care that they've lost your taxes from you having to give up your job.

I think what people mean when they say is that they will homeschool instead is that they might in groups of displaced friends/students get together and pay for tutors together, if the local state offering is poor or they cannot get into a good state school.

It is perfectly conceivable that groups of 5 families get together with similar aged children and do just that. If I am hiring the Maths & Science tutor online and Monday and Wednesdays are Science and Maths day at my house whilst I work from home, as a model it could work very well. On Tuesdays and Thursday mornings it is languages, English and History at Y’s house etc. And they share the 1:1 swimming instructor on Friday mornings and music in the afternoon etc. I do believe communities can get this kind of thing off the ground. I have friends who homeschool and often the parents themselves do now impart their own experience to other kids who are friends, for example, if they are French or an engineer and good at Maths.
There is no way the state can provide a toxic state school environment for both teachers and many children and then expect that people who are good parents are not going to find an alternative.

Each to their own but that sounds horrendous to me. In terms of the organisation/ having children learning at home while you WFH, essentially setting up a mini school. Good luck to anyone who goes down that route though! I'm sure it's what a lot of home schoolers do already.

And people were specifically referencing that the govt would be losing out on their income tax money from them having to give up their jobs to home school. Which unless lots of people are likely to do the same is probably quite irrelevant.

The organisation of it (who pays the tutors / where lessons will be, who is supervising / which house they will be at / lunch etc etc) sounds like would almost be a full time job in itself!

You had better cap it at four children or you could find yourselves charged with the criminal offence of running an unregistered school.

@Londonforestmum and if they are not careful it could actually be considered to be an unregistered independent school, which in itself is illegal. OFSTED bust dozens of unregistered schools every year. https://assets.publishing.service.gov.uk/media/5aa9495de5274a3e3603ad0e/La_Guidance_March_2018.pdf

I can see it might be feasible, just, sharing tutors/parental knowledge with another family to home educate at primary level. I can’t see it working at secondary though where teenagers interests diverge.

This report covers the difficulty of exempting SEND provision if you are interested (part way down - there don't seem to be page numbers) https://www.edsk.org/wp-content/uploads/2024/03/EDSK-Obstacles-to-adding-VAT-to-independent-school-fees.pdf

I think this will be one of the hardest parts of the change to get right. It's complex given the different systems in different nations and these are often children who've really struggled to get an education that meets their needs. There are some excellent independent special schools that do fantastic work. It would be devestating for children if they closed. A friend of mine is a teacher (and parent) in one near us and says that they often admit children who they know will get a EHCP eventually but parents struggle with fees for a long time as the process is drawn out, appeals needed etc. Real damage could be done to these schools if this is rushed through. TBH I suspect 'loophole' often means 'we hadn't thought of this and the policy might not raise as much as we thought'. If this really is intended as a responsible policy change I hope they take the time to understand, consult and carefully craft the change.

@SaffronSpice - given local authorities do not even know the exact number of homeschooled children and the “estimate” was 92000 autumn 2023 nobody actually checks anyway. They cannot even get real criminals these days so chances of that happening virtually “zero”. Besides my friends do not run a school. They have tutors for their own kids and sometimes other children join in in person or remotely.

The amount of children being homeschooled is going up for a reason. And again once a homeschooler always a homeschooler is not correct either, people pick and choose. Some will send their DC to school for most of ks2 until it gets to Sats time in year 6 and will then send them again into Sixth Form. Just like private schools, they will pick and choose what suits them and their DC at the time. Some people also just want the freedom to travel. Not everyone is going to be a good little scared citizen willing to work non stop and contribute for that lot to indoctrinate your kids in a high stress environment and piss your cash up the wall. There are plenty of people opting out now.

The link provided by one of the posters above actually states “An 'independent school' is defined' as a school that is not maintained by a local authority or is not a non-maintained special school, and at which full-time education is provided”. A home Ed group wouldn’t be providing full time education I wouldn’t have thought.

EHCP or not, parents who have moved their children into the private sector after documented difficulties in the state sector (all recorded) won’t they have some claims against the state under disability discrimination if they are then unfairly penalised by VAT? If the state has literally failed their child surely there must be some rights they can try and rely on? And some keen parent lawyers can bring class actions?

Well precisely @Another76543- various little tutoring groups are not a “school”.

This sounds great for a certain kind of group/family but it seems highly unlikely that you'd be able to get 5 families on the same income with kids working at exactly the same standard in every subject especially swimming and music.
It sounds expensive as well.
It might be easier just to try to find the extra 20% if that was the only reason for doing this.