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 state schools here are perfectly decent and full of lawyers / doctors kids so the choice to go private is for other reasons than dreadful state.

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

I believe that they’ve said it’ll be 20%, but not everything subject to VAT is taxed at that rate.

Some things are taxed at 5% (gas, electric, car seats, boilers, nicotine patches etc). Other things are actually liable for VAT but at a rate of 0%, which means that there is no output VAT to account for, but the input VAT can be reclaimed. This is very different from being exempt, like education currently is, which means that input VAT can’t be reclaimed (private schools pay VAT on goods and services they buy but currently can’t reclaim it, unlike state schools).

There are a range of online schools. EHCPs for children with SEN can place them with such a school (something else not available to children in Scotland). I imagine they would come under VAT too though children often access them differently - often buying specific subjects rather than a traditional school day.

I think most parents that decide they can't / won't afford private anymore, and don't have good state options nearby would be more likely to move to an area that did, rather than home school tbh.

Home schooling is quite a niche option, which you would probably already be doing if you were that way inclined.

Generally it is referred to as ‘home education’, not ‘home schooling’. It is generally not trying to replicate school at home.

You can obtain sport in private schools. Or you can do what state school families do and sign up for sports clubs after school, which is what homeschoolers do.

You can even make friends with other homeschoolers. You can homeschool in groups of like-minded families so M&Ds take it in turns according to their strengths and interests. I'm up for maths, economics, history and politics myself.

The comparison here, again, isn't between "home school and private school", and not even between "home school and a decent free taxpayer-funded school". It's where private school becomes impossible (or at worst the school closes) and the free taxpayer-funded school is unsatisfactory. In that situation, do M&D both keep working FT to pay for....holidays etc? Or, being willing (which they already are) to go an extra mile for their children, do they think of another way?

Some of you may be right, it won't be for everyone. But it's part of a much bigger picture: private school families move mountains for their children. For those of us at tipping point, we won't automatically do what the government wants us to do, we'll do what suits us. That will take many forms few of which are anywhere near as good for the public finances as what we do today.

You keep saying this but, as an economist, it doesn't make sense. We rank our preferences A, B, C and currently we choose A.

If A isn't available or affordable, we'll choose B. What you're saying is "if you preferred B you'd already be doing it". You're ignoring the significance of removing A.

For me and many others I'm working with on this: private school>good state school>homeschool>move house>bad state school. Others may think differently.

I think the risk is that the whole thing becomes loophole whackamole and the net will end up having to be cast a lot wider than many are anticipating as well as taking a lot of time and money to thrash out. I just dont see how they ring fence private schools in a sea of wider privately provided educational services. Legislation can't just be arbitrary or there will be challenges. When you look at most prolonged legal battles they are fought over absolutely tiny things that have huge and wide ranging implications. Honestly, if they're going to do this I think they have to say all private educational services are VATable or none of them. Otherwise it's going to be ridiculous.

I think you're right. State school families using tutoring and music lessons etc should expect to be in the net.

I completely agree re: loopholes, and the more "VAT is only charged for these very specific items under these very specific circumstances" clauses they put into the legislation, the more likely they are to balls it up. So any changes are likely to be more broad-brush.

But, an individual private tutor or music teacher is unlikely to be earning more than £90k pa and therefore VAT won't be an issue for lots of private tuition.

I believe that education is currently VAT exempt if provided by an eligible body. So possibly the simplest change would be for Labour to say that a private school (however they choose to define it) is no longer an eligible body. And actually the current legislation says that private tuition provided by a sole proprietor or partner is exempt, so that could continue even if they make other changes.

But individual tutors etc are unlikely to be vat registered unless their tutoring business is turning over more than £80k.

However, nurseries, after school care, universities etc..

I really don’t think it’s as straightforward to implement as they think.

This is an interesting article

https://www.counselmagazine.co.uk/articles/abolishing-private-schools-and-redistributing-their-assets-social-justice-at-the-expense-of-human-rights

It was written after the Labour conference voted in favour of abolishing private schools altogether but makes this point with regards to the European Convention on Human Rights, which I believe we are still bound by.

“It essentially means that the right to access an existing educational establishment eg a fee-paying school such as Eton, is a right guaranteed by the Convention in the interests of plurality, which plurality itself is essential for the preservation of democratic society as conceived by the Convention. Legislation aimed at abolishing or impairing the existence of such schools (eg by imposing VAT or removing Charitable Status) would therefore most probably be unlawful and incompatible with the Convention.
Such was the conclusion reached by Lester and Pannick in the Joint Opinion of Anthony Lester QC and David Pannick (ISIS document No. 11) April 1987: which concluded both that the abolition of fee paying, independent education would be a direct violation of A2P1, and that the removal of charitable status from, and the imposition of VAT on, independent/private schools would probably amount to a violation too.”

‘ think you're right. State school families using tutoring and music lessons etc should expect to be in the net.’

er, no. Depends on the provider - no music tutor or other tutor we have ever used has charged VAT, school provides instrument lesson for free in school.
The weekend stage school one D.C. attends does - clearly the business is over the VAT threshold.
Thats how it works. So it will depend. But unlike private school parents, most of us aren’t obsessed with trying to wiggle out of VAT payments. Most people are used to the idea that the plumber, builder, the garage who MOT your car will be charging you VAT on top of the service.

Private schools are businesses providing services. VAT first, the. Hopeful the laughable ‘charity’ status many have will be next.

Businesses with a turnover of below £85,000 do not have to register for VAT. This would likely cover independent tutors and music lessons.

school provides instrument lesson for free in school.

It’s not “free”. The state is funding it, whilst some of us are funding our own music lessons out of taxed income.

Linked with this is the ability for state school parents to buy musical instruments VAT free under the AIPS. Meanwhile, private school parents have to pay VAT on their instruments. As a family we’ve paid a lot of VAT on instruments over the years. We are already penalised through the VAT system for choosing private education. Why should only some children be entitled to VAT free instruments and “free” lessons?

Half of private schools don’t have charitable status.

I just think for most people home school/ ed is such a different kettle of fish to private school (in terms of parental input, and benefits etc). Yes some may choose to do that but it seems much more likely people will move to be near a preferable state school (if they don't have one already).

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)

And half do. None should have it.
At least some aren’t bothering to pretend to be charitable, so next stop - pay VAT on fees

Wow. I’ve heard of entitlement before but this takes the prize! I can just imagine my parents faces or DPs faces when we ask them to pay us to look after our own kids 😂😂

A choice between private school and home Ed does seem an odd one for most children. There may be some for whom state school has failed so home Ed is the remaining option. But most home educators go that route because they don’t want to follow the very prescribe academic route that is generally even more pronounced in private schools. Most I know who do this follow a very child-led process, working on projects of the child’s choice. The parents may facilitate things but beyond early primary level they rarely ‘teach’ or organise lessons.

Well they aren’t pretending to be charities. They just are. Being a charity is a legal status. Many independent schools meet the tests to qualify for charitable status and always have done. They are some of the very first charities. What you are saying is that you think the definition of charity should be changed so that independent schools don’t qualify. This is near impossible legally partly because charity law has developed so as to insulate charities from the political whims of the time to an extent.

Lots of charities charge money for services and are businesses e.g private hospitals, some theatres, operas, ballets, universities etc.

Unfortunately @Circe7 - @Quatty‘s type of post illustrate the public’s ignorance of what are quite complex tax and legal issues.

There is no way they can get to prepayments made before they win an Election without vast changes to VAT. There is no way they can get to prior years Capex spends to be set off either.

There is no way they can stop private schools restructuring their offerings. No frills anymore- simple academics plus VAT. Sports/music will then be offered by self employed persons under the VAT threshold.

All this type of stuff will do is remove employee protections towards those currently employed in private schools.
We use music tutors extensively. The richest private schools offer some employment and charge parents more for music lessons precisely because they offering those music tutors proper employee rights.

The same applies to the swathes of teaching staff also offering sports coaching and trips in the holidays. The sports coaching can be easily outsourced so as not to be provided by an employee.

All this will do is lead to clever restructuring to maximise capex spend and minimise employee spend. It has already started and private schools are taking teachers out of TPS.