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!

"Giggleswick School in North Yorkshire – vowed it would not increase fees if Labour brought in its policy.Headmaster at the small, rural school, Sam Hart, told The Yorkshire Post: “We are committed to not compromising the quality of our educational offering. However, it will mean restructuring programmes and staff, and unfortunately, reducing bursary support to cover the VAT bill.” "

I was massively simplifying it to explain the query on not passing on/passing on vat charge to the customer that why I put “profit” in commas I actually meant net sale but if I’d put net said the poster who was querying wouldn’t have understood being as they didn’t understand about passing on/not passing on vat

Not if they are a service business where employment is their main cost

i know I work as a charted accountant and deal with vat and corp tax daily, my example was explaining on a school can pass on/not pass on vat to its customers.

if people cannot understand the example I am giving in how a school passes on/doesnt pass on vat in an example then they clearly do not understand the vat proposals either. I totally understand the vat proposals thanks and do actually not in favour but not for some of the reasons posted here

Most of the schools I deal with through work base reserves on costs not turnover, so they’ll have a reserves policy of say a year or two years worth of costs so in worst case scenario they can cover costs if they lose income. Whether they choose to use this to ease the increase to parents I imagine will vary from school to school

‘As a result, we’re seeing schools being forced to consider restructuring and even redundancy’

Well, the great news is there’s a shortage nationwide of teachers so there’ll be plenty of opportunities for any teachers and support staff who’re looking for new roles.

This is what businesses do, restructure, cut costs, lay staff off. One of the risks of working for a business rather than a state school.

By being deliberately disingenuous you are just making yourself look stupid.

It’s not the teachers who are most likely to be made redundant.

it does make me wonder what private school
parents think state schools are like, as if they don’t have admin staff, support staff, pastoral staff, grounds staff, cleaners, cooks, Minibus drivers, sports specialists, music tutors, IT support, lab techs, etc

And if they lay off all the non teachers and keep the teachers will they be doing the cooking, cleaning the toilets, maintaining the grounds etc

If that was a simplified explanation, I think it was a bad one. Not an accountant, but work in finance.

2.1k vacancies. Expect 5k redundant teachers and 4k support staff on most optimistic estimates (IFS). 13k and 11k if schools absorb VAT by cost cutting. 25k and 2k on worst estimates.

And few / almost none will match state school vacancies for location, motivation, subject, capability or qualification. No good if a state school in Sunderland needs a maths teacher and you're a 52 yo Latin teacher in Surrey who hasn't done maths since GCSE.

Give us another opinion, do, so we can keep explaining how bad the consequences of this tax are. Don't tax education. Every private school place contributes enough tax to cover cost of 3-4 state school places, or >10x the value of the so called "tax break".

There was a piece in Forbes 2021 about the politics of envy https://www.forbes.com/sites/taxnotes/2021/08/09/envy-doesnt-explain-soak-the-rich-taxation/

the bits that struck me as relevant to taxing education:

"depriving the rival of the good may sometimes be more important to the envier than gaining possession of the good itself."
"Envy necessarily involves a desire to dispossess the other person of that envied item, regardless of whether you get to possess it yourself."
"[Envy] aims, at least in terms of one’s wishes, at destroying others’ good fortune."
[it] is about “punishment for its own sake.”

You said
“not passing on the increase means not raising fees, if I am charging £1000 for something before it becomes vat able and I then charge £1200 I am passing on all the vat increase to my customer and I still have £1000 “profit”.”

I fully understand the figures but your statement said that a school charging £1000 would have £1000 profit. I think perhaps a chartered accountant could have used better wording.

Which bit didn’t you understand? Becuase I refered to net sales as “profit” or the point I was trying to make about the vat being passed on/ not passed on to customers?

I said “profit” in inverted commas not profit, if I had meant profit as in profit after costs I wouldn’t have put it in inverted commas

I understand the issue. I think it was unhelpful to use “profit” to describe net sales when profit is a word which already has a reasonably well understood meaning as sales minus all COGS and operating costs (leaving aside DITA at the moment)

I don’t think putting a common word in inverted commas and expecting posters to know what you mean by that is simplifying things!

anyway, I will leave it there

Whilst @Morph22010's use of "profit" grated when I read the post, I have to say that profit is not as well understood as you might think. A few years back I had an argument on here with two posters who were adamant that a business cannot increase its profits by reducing costs.

‘And few / almost none will match state school vacancies for location, motivation, subject, capability or qualification. No good if a state school in Sunderland needs a maths teacher and you're a 52 yo Latin teacher in Surrey who hasn't done maths since GCSE.’

ironically while private school teachers don’t actually have to have teaching qualifications, or even have experience in the subject they teach, state schools do - do you’re correct.
No latin teacher is going to be given a job teaching maths, without the right experience or qualification.
Mores the pity, eh? I can’t think of anyone I’d rather have teaching my DCs GCSE maths than a Latin teacher with no qualifications in the subject! Unfortunately they’re stuck with expert in their subjects, with their degrees, diplomas, PGCEs., postgrads .

Perhaps being unemployed could be considered a ‘motivation’? Needing to earn money to live on has certainly always been a great motivation for me.

I don’t think that’s the case on states schools now based on what I hear from teacher friends, a lot of schools are getting any teacher to teach subjects they are short of staff for

I’m going to call bullshit on this one, given that the final straw for us moving DS from state to private was that for 6 months he was taught physics by an art teacher.

Academies are allowed to hire unqualified teachers, which is quite a large proportion of state schools now...

However, an unqualified teacher is not necessarily a bad teacher, and a qualified teacher is not necessarily a good teacher.

And yes, many schools are hiring teachers for subjects that they aren't specialists in, just to get someone in front of pupils. But that's generally a last resort.

ironically while private school teachers don’t actually have to have teaching qualifications, or even have experience in the subject they teach, state schools do.

You are incorrect. Academy and free schools don’t have to employ teachers with QTS. These schools account for 80% of secondary schools.
https://www.gov.uk/guidance/qualified-teacher-status-qts#:~:text=In%20some%20schools%20in%20England,can%20employ%20teachers%20without%20QTS

No latin teacher is going to be given a job teaching maths, without the right experience or qualification.
Mores the pity, eh? I can’t think of anyone I’d rather have teaching my DCs GCSE maths than a Latin teacher with no qualifications in the subject! Unfortunately they’re stuck with expert in their subjects, with their degrees, diplomas, PGCEs., postgrads .

This is literally what is happening in the state sector; non subject specialists are increasingly common.
https://schoolsweek.co.uk/extent-of-classes-taught-by-non-specialist-teachers-revealed/