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!

Yes the Adam Smith report is excellent

It's not really a case of the "fee" going up. The "fee" itself remains unchanged.

But if/when Labour add VAT to school fees and they complete whatever steps are necessary to make it take effect, then your school will have to add VAT to the next fee invoice that they send you. They will have no choice over that.

It's like if a shop is advertising something as "£100+VAT" . At the moment that would cost you £120. If the VAT rate increased to (say) 25%, then the shop could still advertise the product as "£100+VAT" - but it would now cost you £125.

So think of it like your school fees are £x + VAT and it just happens to be that the VAT rate at the moment is 0%. If Labour have their way then the VAT rate will be 20%.

So yes, the amount you have to pay could well go up in January. But hopefully your school would be able to reduce their fee a bit, and then add the 20% VAT, so that your overall increase was not as big as 20%.

your school is a business providing a service and it can charge what it likes when it sees fit. Regardless of what any government does or says.

And then it has to add any taxes the government says must be charged,

I'd be very surprised if it wasn't timed around the beginning of the school year. I think it's an ill-thought through dog-whistle policy, but I also don't think Labour are stupid. They know it's got popular support, but they also know that lots of people (and not just the mega wealthy) will be arguing that it's unreasonable, and flagging up the consequences for individual children. I think that, by delaying it a few months and timing it to coincide with the start of a school year, they'll seek to paint themselves as both the avenging angels of the working class (to the left of their party), and the reasonable listening government who understand that even rich children deserve a little bit of notice and consideration (to the centrists in their party).

You’re more optimistic than I am! They really don’t care about disrupting the education of tens of thousands of children. If they did, they wouldn’t be proposing this ridiculous, ill thought out policy in the first place.

6% ish of children are privately educated - and I would argue that the majority are not Labour voters either. The fact that schools are offering for parents to pay up front for for an entire education if they want just shows how wealthy most are.
It’s happening. And it’s supported by the most of the 90 odd percent who use normal
schools.
It’s the charity status that really should be looked at too.

@Another76543 Maybe. But I think it's easy to posture when you're in opposition. Once they're actually in power, I think the serious opposition to the policy will ramp up, the fickle media will start running with a couple of the 'my SEN child has nowhere to go' or 'my child's class is going to expand to 103 because of private school closures' stories, and Labour will decide to delay by a few months to seem reasonable. But I could be wrong!

@Quatty paying upfront almost certainly won't make any difference on the VAT front.

It goes up to 18% for 6th form and no not all private school parents vote Tory.
Labour have binned ending charitable status.

Not many schools are actually suggesting parents do this. None of the private schools I have dealt with are. Any that are suggesting it are usually heavily caveating it by saying that it might not avoid the VAT. In any case, many of the pre payment schemes are set up in such a way that it definitely wouldn’t avoid the VAT.

Opposition is already going on behind the scenes and this will start playing out more in the media over the next few months.

Yes, exactly.

However if anyone is really concerned about affording VAT then please sign the change.org petition and get involved. No point sitting back and hoping. We certainly will be pushed to afford VAT over the next 5 years.

‘Not many schools are actually suggesting parents do this. ‘

Many offer this anyway. Friend is looking into it as their school offers it to avoid some of the increase that they put on fees year on year. If they pay now for 7 years for the 3 kids they pay a guaranteed amount with a lower %!increase apparently.
School have suggested that this may also help IF VAT changes too.
Though hopefully there will be something in place on legislation to ensure that any sneaky attempt at loopholes are not available. Seems risky to me on the schools part.

Good.

What about clubs and stuff provided by mainstream schools, they would be caught?

Yes, sorry, I meant that schools are not suggesting it to specifically avoid the VAT. Many already do offer prepayment schemes. Many now aren’t guaranteeing a specific fee increases though. The schemes now often say that you might be liable for additional fees depending on future increases.

It will depend on the exact wording of the legislation. Labour would be able to make it apply immediately but it would also be possible for them to set a future date for it to apply, to give everyone a bit of notice. It would be wise to budget fpr it to apply to the fees immediately and if it doesn't happen you'll have a bit of flex in the budget which will be nice.

It’s a policy. They can design it however they want. What possible advantage could there be to starting it part way through an academic year? It would cause chaos.

you don’t need to worry about this at all.

In theory any activity run by a private organisation ie not state funded could be included. So not Wrap around care in a state school unless it is provided by a separate organisation. However private sports clubs (ie not at a state funded leisure centre), music tuition, dance company etc could all cone under it. At this point there is no way of knowing but yes by opening the door to taxing education (which is illegal in EU because education benefits all of society) there is potentially no limit to what can be taxed through VAT. No imminently but through stealth by gradually widening the scope of what is included. It isn't just about state Vs private, it is about what this policy could lead to in the long term!

It does have to go through parliament. The current exemption for independent schools is set out in the Value Added Tax Act 1994 Schedule 9. That cannot be changed unless parliament approves.

VAT is at the point of invoice. Unless they change the whole way VAT works its likely sept invoice wont be vatable but the january invoice might be.
Fees in advance is a bit complicated as often it sits in an account and is still invoiced for each term.

I am less optimistic. The ugly side of this policy is to cause chaos to private schools and they believe their voters like it.

Nonsense. No incoming government would behave in a petty and vindictive way, when they are already voted in and there is a vanishingly small downside to waiting till after the summer holidays to start charging. You’ve had too many years of childish Tory government to understand how adults would actually run the country.