Will VAT on private school fees lead to a partial collapse of the sector?

[mids2019]

Will VAT on school fees coupled with cost of living drive a lot of parents from the private sector or will the majority absorb the cost? Are the numbers that potentially end up in the public sector going to offset any gains to the treasury through VAT?

Labour are working at about 4-5% transfer rate to the public sector but is this an underestimate?

There’s quite a few on mn who post in this vein. Depressingly

Oh there are loads of them. Going into a frenzy now as the GE is about to be called..

But they are not like the top universities.
Private schools admit the kids of rich people groom them to think they are superior (ie Boris Johnson) while giving scholarships to the smart children to boost the grades

The same people who don’t think we need to have academics competing at the top of the world academic market either when they’re just there to hand out first degrees..globalisation, what’s that?

@Whyhaveibeencutoutofmamsnot I've been reading your sort of comment on MN for yrs and it's completely made up. What do you mean, 'they're taught to think they are superior?' It's utter nonsense! no school teaches it's pupils they are superior. What they teach is for each student to be the best they can be. The best version of themselves. They expect them to take advantage of every opportunity the school offers whether that be clubs, societies, facilities & teaching resources and yes, they are very ambitious for their students (as they should). This builds confidence in the students to believe if they apply themselves, they can achieve whatever they put their mind to. They also teach them that they must give back to their communities and look for opportunities where they can make a difference. This is the same message all independent schools send to their students not the made-up version you & such others on MN peddle.

This sort of nonsense is usually peddled out by people with no experience of private school. They can’t bear the thought that most of those at private school are perfectly nice, decent people.

Yes that. Plus the sheer lazy bitterness. Dreadful.

Boris Johnson was a scholarship kid

It's an easy vote winner for a left wing party that isn't that left in reality. It hits a demographic hard who possibly aren't the most vocal. If any other area of life was suddenly taxed by 20% there would be outrage but education seems to be a valid target and the reason financial hardship this may bring is being ignored.

Perhaps this pouch is to shield the fact student fees in my opinion will have to rise in order for universities to survive and this is going to be a major blow to working class students. However the government can still claim to be in the side of low income groups by pointing to this.

The money raised (if any) is not far marked for any specific educational scheme and doesn't address many aspects of school culture which is causing failure.. Money does not cause a sea change in student's attitude to learning or school environment. OK employ more teachers but will they stay? Build shiny new buildings but if little Johnny is being a dick in an old building he is going to be the same sick in a new building.

Let's just charge VAT on all education. Then we can pour those £billions into state education. Obviously that includes university education. Why should people who go to university and go onto high paying jobs because of their degrees be subsidised by the taxpayer. Let them pay the true cost of their education.

Well it looks like starmer if he got in, will kick the vat into the long grass , I suspect due to the negative impact on state and how long it would take state to take extra kids, it’s struggling as it is, and now he isn’t ruling out increasing university tuition fees. So looks like private schools will get a pass from him, unis will get hit hard and become the preserve of the wealthy.

Monstering people you’ve decided you want to hate is a common human trait which leads to a lot of bad stuff. It’s particularly disturbing when it’s directed at kids.

Or make sure your kids study MFL and go and study in Europe! Fees much lower and lots offer financial assistance.
oh but wait - the state schools are dropping MFL in droves. It’s a mess.

There’s a couple of threads descending into car crash territory with people losing it

That’s the main outcome of Labour’s policy, not improved education or better for children

Those things are a negative anyway, the main outcome is to prime some societal clash

Yep. That would make sense. All for one and one for all. Consistency of policy.

It may well happen, once the VAT exempt on education drawbridge has been lowered.

Something many Labour voters desperate to ‘punish the rich’ , don’t seem to grasp.

I’d be happier with VAT on all education, rather than VAT cherry picked for private education. It’s fairer, and more fruitful approach.

Of course it would mean some people couldn’t then go to university. The loan system wouldn’t cope with it.

But as we know, Labour are good at that. Bringing people down not raising them up.

It’s already starting to happen by the looks of things.

https://www.telegraph.co.uk/money/tax/labour-vat-raid-blamed-closure-hampshire-private-school/

Schools closing will divert more parents as they won’t want the potential move mid way through.

Smaller schools will feel it.

What a pity Labour want to damage a sector for votes

That school has been struggling for years with expenses and dwindling numbers. Many state schools as well as private schools are closing their doors due to falling rolls.

I draw parallels with fox hunting

A lot of people don't think about culling foxes on a day to day basis as they have other things to worry about. However there is an extremely vocal near aggressive branch of the Labour party that managed to get fox hunting on the policy agenda using up valuable parliamentary time and producing laws local police forces do not have the money or will to enforce.

There may be a strident party of the Labour executive that have pushed this policy through to appease members many of whom are ideologically strongly left wing (that doesn't reflect national opinion. I think perhaps a lot of the shadow cabinet are in reality a bit queasy about this but have to enact policy to cement support amongst Labour members. A lot of the shadow cabinet personally probably are well acquainted with people who went to private school and can possibly see in their social circles the real angst this causes parents.

I think there is a good of a dial down on this policy as Labour assumes government and they realise they have to govern for all and such a radical left wing policy doesn't need to be enacted in reality and there are larger policy areas to concentrate on.

The people who advocate policies such as this are often academics and wducarionists who hold this as an ideological stance yet ensure their own children benefit from good state schooing including tuition if necessary. I absolutely understand wanting the best for our children but we have to question hypocrisy.

You average guardian columnist will write articulately about taxing private schooling but I am sure will ensure their own children benefit from the best the state can offer whether geammar, faith or comprehensive in a wealthy catchment. The children of journalists aren't going to sink comps are they?

I think you’re very right about hypocrisy in education choices OP. (Although only a small subset of privileged parents have a choice and a small fraction of those to make the choice to go private..)

So I can’t believe taxing the private families more is going to make any massive financial contribution to the overall education system which has been starved of investment for 14 years by the Tories. This feels like very simplistic problem solving. Kind of policy making showboating that lacks real political thinking through by Labour. It’s going to really badly affect SEN lids and their families.

Local authorities already ration EHCPs at the behest of Tory central government (read up about the safety valve initiative) so this is not a protection for SEN parents. Very disappointing Labour Party thinking for those of us desperate to vote for change after 14 years of Tory neglect of the country.

Interesting take in the Tory Spectator

https://archive.ph/3rdpm

But I wish I could sympathise with private schools a bit more than I do. Labour’s policy would strike me as a bit more of an outrage had private schools not spent the past 30 years steadily pricing the middle classes out of private education. The expected 20 per cent uplift in fees (assuming that schools pass on the full burden of VAT) will merely echo the real-terms rise in fees which the private sector has already inflicted on parents since 2010. Since 2003 the real-terms rise has been 55 per cent. Doctors, lawyers, small business-owners – groups who in the past had little problem in affording private education – have steadily found themselves struggling, and looking to the state sector instead.

The Conservatives bark at universities for favouring wealthy overseas students over UK ones, but the independent schools sector has been doing the same for years. Of the 556,551 pupils enrolled at private schools last year 62,708 were from overseas. Of these, 26,195 had parents living abroad.

Not all private schools pitch themselves in the international market, but those which have come to rely on oligarchs’ children to allow them to jack up fees can hardly complain when Labour sees them as fair game for VAT. Independent schools will point towards the growing numbers of bursaries and other forms of assistance to argue that they are deserving of their charitable and VAT-exempt status, but how much stronger would be their case if they focused on affordable, academic education rather than joining an arms race in ever-smarter facilities.

I don’t think the answer to an affordability crisis is to make it more unaffordable and more exclusive though…

I think VAT should be removed from all educational establishments. Private nurseries have to pay VAT whereas school nurseries don't as they are part of a school. This increases fees for parents using private nurseries (ie your consummables). Some private schools are for the rich but other parents are using private education to ensure their child's needs are met and wouldn't be able to meet an increase in fees.

I have no vested interested in the debate as all mine went through the state school system.

Private schools are in the same position as private nurseries in that they already pay VAT but can't recover it (state schools and nurseries can recover it). The proposal is for parents to pay VAT on the fees and if that happens the schools would be able to reclaim their input VAT.