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!

My understanding is that Labour will not allow that as they see it as a loophole.

That particularly annoys me because one of the benefits of private school for me is that I pay for everything together.

Our school doesn’t charge for additional activities. So in paying the fees I am implicitly paying for swimming, music, drama, hockey, wrap around care, library access, clubs, tutoring. And now I am going to have to pay VAT on all of those just because they are provided by the school.

https://www.saffery.com/insights/articles/vat-on-independent-school-fees-what-you-need-to-know/

This covers it. Apparently there’s speculation that new rules might be introduced to prevent it. That would make the legislative changes even more complicated and increase the risk of unintended consequences even more.

5 years out of work is still a substantial career hit?

Not to mention the other downsides of home schooling. I'm assuming if it's something people really wanted to do they already be doing it - rather than resorting to it after not being able to afford school fees.

Exactly the same here. So, we could be in a position where private school parents are taxed on these things, but state school parents are not. The most straightforward way of dealing with this unfairness would be to ensure that the state school parents have to pay VAT on those things too.

But in state schools, eg music lessons may be supplied by an outside teacher who the parent pays directly. If they are set up as a company and earn over the income threshold, they will have to charge VAT. As the threshold is something like £86k, most probably won’t.

(FWIW, I paid separately for piano/drama/extra language lessons with mine at private school, so it’s not all in at every school)

Our individual music lessons are billed separately and are taught by external teachers, but within the school day. The cost is added to our invoice. There is a question over whether or not there is a way that schools will be able to bill this amount separately so that VAT isn’t payable on those fees.

With piano, I certainly paid the teacher direct.

But my main point was, you can’t just “make state school parents pay it too” if the supplier of lessons isn’t large enough to be VAT registered.

But it would be a good start if they did have to pay it on the things that are likely to be big enough to pay VAT - swimming/drama clubs/sports clubs/wrap around care etc (if private school parents are going to be charged on those things too) individual music lesson and tutoring are only a small portion of the things the poster was talking about.

I think the home school thing is a bit of a red herring. I don't think there are really that many people who would choose to home school rather than go state (I know some would, particularly if local schools ate particularly atrocious or if a child can't cope with mainstream school). But I do think a lot of women would either give up work or reduce their working hours if they went state, and not only because they might want to. Among the families I know, the ones who were wavering between state and private but chose state, the women typically spend a huge amount of time facilitating out of school activities to supplement their children's school education, and to accommodate the shorter school day. There is absolutely no way my husband and I could both do the jobs we do and also facilitate the children being able to do the range of activities they do, unless they were in a private school where it's all on site - there simply aren't the facilities or the public transport around to make it possible. Part of the reason for choosing private education was so that we could both do the jobs we love while also giving our kids the extra curricular activities they want. It would be a massive blow to me professionally if they had to move school, because I would feel I had to change jobs to reduce the impact on their lives (and yes, it would be me, simply because I earn less than DH) .

Yes, I know - I was using the music lessons as an example.

Whilst an outfit such as Stagecoach will have sufficient turnover to register for VAT, any school activity may be run by an outfit either too small to register for VAT eg a local sports club.

The biggest exemption is childcare, particularly for boarding schools a large proportion of the time could be put down to childcare, I’m sure everyone would love it if private childcare became vatable

Not quite the point. To do private school you have to be willing and able to afford the fees. Fees are expensive. Some parents are already marginal and wondering how they manage the remaining years. 20pc (or a bit less allowing for reclaim) is a big deal.

If they pull out....and some will....they will find their next best choice. For some, a decent state school place and, like many state school families, disposable income for holidays etc. If there isn't a decent state school, home school is an excellent choice. Either way it's a bad outcome for the public finances.

Unless you know the circumstances and preferences of a great deal of parents, I am not sure you are well placed to call this "a nonsense".

I guess it depends on why exactly you are paying for private schooling. If your are paying for the superior education and you have a child that can engage with typical learning then home schooling is going to be a big step down if you are going to be teaching them, unless you are a teacher yourself or you are you are going to pay for private tutors (who will have vat added also depending on turnover). Where private education is for sen (however slight) and people are doing it for smaller class sizes as child can’t cope in ms I totally get how home Ed will be an option, these will be the casualties of the policy

Have Labour said that it will be 20%? Could they set it lower like how some things are 5%?

Personally I don't agree homeschooling is a "big step down". I think it's automatically a superior experience to a mediocre state school, as long as M or D is curious and willing to roll sleeves up with kids. I know a few homeschoolers and they pool resources, share their specialties, and organise extra-curricular stuff together.

Currently it is not proposed to add VAT on tutoring, although I cannot understand why that's "fair" or whatever.

I’m wondering if this could spark the growth of real time private online schools- particularly at secondary age. However I’m unclear on VAT rules on cross border online services. For example if the school was based outside UK and billed from outside UK but the students were physically in the UK, is that VATable? If not, that could be an alternative to home school or state school. That said, I’m kind of surprised they haven’t taken off already so maybe it’s just not something parents want.

@ThreeFeetTall - I believe they have. The amount of money they claim will be raised is based on this %.

I think home school if you want to home school, but don't do it as a protest about VAT/how much you can't stand the local state schools. Home schooling is going to be a very different experience to private education - yes some think better, but the people who have chosen private school have generally done so for the facilities, specialist teachers, clubs, ease of having it all in one place, etc, none of which you get with homeschooling. I personally think the amount of people who will pull out to go to state or home school because of an extra £4/8k pa will just be replaced by others who are willing or able to pay. Can see it hitting the smaller preps more though and maybe some will need to close, but most private schools around here at least are over subscribed as it is. Not in favour of VAT being added by the way - but just don't think the threat to pull out and home school holds much weight.

‘But realistically, it won't happen.’

you’re burying your head in the sand, but go ahead if it makes you feel better.

And has for how much- it’s VAT - not some random amount just for private schools.

A lot of schools are starting a fees in advance policy, presumably to avoid this. Ours is.

I wouldn’t want this. Elder kid had proper online (secondary) school in lockdown and it was bloody miserable. Also… a lot of families have two working parents; this would require one at home to ensure kid was ok, went to lessons etc.

Honestly I wouldn’t either as my dc enjoy school but there is a significant subset of kids who don’t enjoy physically being at secondary school, who are reasonably motivated and who have at least one parent who WFH the majority of the time. The dc’s cousins would be totally fine with online, real time school ( I think the real time bit is important).

My understanding from friends that privately educate is main drivers are sport and better class of friends neither of which apply to home schooling

Yes I’m from an area of Nottingham where the schools are very good (west bridgford edwalton area - my parents are still there). It’s a nice residential suburban area and edwalton in particular has some lovely properties in the good catchment areas. However a significant number of people living in those lovely houses send their kids to the 4/5 local private schools(NHS NGHS, Trent, Loughborough etc). They will simply have the ability to switch at an entry point and it will be those current state families on the very edges of the current catchment area that miss out or get pushed into different school catchment areas. The private school families aren’t living in crappy areas of the city with poorly performing schools funnily enough

It depends entirely on what Labour decide to do.

After they get elected they form and government and pass a budget. Usually within a month or two.

They can chose to make a Vat change effective immediately- same day or to take effect from a specified day e.g start of term, next calendar year, next tax year.

It must be paid from the date it takes effect. Some schools may absorb some or all or none of the cost.