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?

Where did you get this from because all the ones we have spoken to so far are against the VAT policy as it goes against their principle of choice

This is how the Lib Dem education spokesperson responded when asked about VAT. It certainly doesn’t sound like they want them abolished!

“Dear [ ]

Thank you for writing to me on your concerns over Labour’s pledge to remove the exemption from VAT on independent school fees.

First and foremost, I would like to assure you that as Liberal Democrat Spokesperson for Education, Children & Young People, I - along with my Lib Dem colleagues - do not support ending the VAT exemption for independent schools, for the simple reason that we should not tax education. Education is essential, and for the public good - and as liberals, we believe it is important that parents are given choice when it comes to their children’s education. You may find of interest the speech I made when this matter was debated in Parliament, the full text of which you can read in the debate transcript, here.

On a wider note, our ambition is for all state education to be of such a high standard, that no parent will feel particularly compelled to send their child to an independent school. I and my Liberal Democrat colleagues want to see an education system that enables every individual, no matter their background or their needs, to flourish, succeed and fulfil their potential, with a level playing field for all pupils, wherever they are educated.

We would like to see all independent schools giving back to their local education community, as many already do, through partnership with state schools. In our own constituency, and beyond, there are wonderful examples of these kind of partnerships - such as between Hampton School and Lady Eleanor Holles School, and the REACH Academy in Feltham. We want to see this kind of best practice - such as the sharing of specialist facilities or teachers, clubs and higher education support - replicated across the sector.

It is our strong belief that removing the VAT exemption from independent schools would reduce this kind of partnership work - which benefits both the state and independent sectors - and would also hit parents who have felt that, for whatever reason, the state sector cannot meet their children’s needs, particularly children with additional needs. As MP for Twickenham, I am aware of many examples of families who have struggled to raise the funds necessary to send their child - who may have experienced difficulty in a state school - to an independent school which could meet their needs, and enable them to thrive. You may be interested to read the intervention I made on this subject, here.

Please be assured that my colleagues and I will continue to fight for all education provided by an eligible body to remain exempt from VAT, or any other tax.

Thank you once again for writing to me on this important matter.

With kind regards

Munira

MUNIRA WILSON MP
Member of Parliament for Twickenham
(including The Hamptons, Teddington, St Margarets, Strawberry Hill and Whitton)”

Oh my, this is embarrassing 🙈 It seems I’m wrong by 9 years! That’s unusual for me as I normally keep abreast of education policy but obviously the LDs have slipped under my radar! It seems now they just want to review charitable status.

No problem 😊 to be fair I think this policy is confusing everyone 🤣

Haven’t read the whole thread but saw several posts about how families at private school can easily absorb the extra 20%. We can’t, we are already cutting back on everything (renting a small place, drive an old small car, I haven’t been to the hairdresser in years, no holidays abroad etc).

The only ofsted outstanding secondary in our area is unfortunately a very rough place so our eldest had to leave and is now home educated (my other posts give some insight into this, things got pretty bad for her). For this reason we made it a priority to send our second child to a private school, which she loves (and had to work very hard to get in to) and we are so sad that she will have to leave it. We are not rich enough to afford another 20% on top of the fees but also not destitute enough to qualify for a bursary anywhere

On the Lib Dem point, I think some people believe they were so embarrassed last time about the tuition fee rise for universities that they won’t let it happen on their watch again. So some people are voting Lib Dem for that reason as well. I understand universities are underfunded, but the solution is not to make them even more elitist. Which this VAT policy will do for private schools.

Lib Dem won’t support VAT on education because they want to take us back into the Single Market. You can’t pledge that and support VAT on private schools at the same time. EU law prohibits VAT on Education.

According to Guido Fawkes (who has a video of it) Angela Rayner wanted to abolish private education:
Back in 2018, speaking at the Brudenell Social Club in Leeds about “Labour’s vision for a fairer future for everyone involved in teaching and learning,” Rayner promised: “we will end the marketisation and privatisation of our education system.” She was met with much applause from the audience and a nodding smile from Rachel Reeves.

Why should her views have changed over the past 6 years? If Labour get in with a big enough majority they may try to put this into practice.

LIb Dem's manifesto. No mention of ending charitable status, any idea where that is referenced?

In addition, we will:

• Tackle the crisis in teacher recruitment and retention by:
• Creating a teacher workforce strategy to ensure that every secondary school child is taught by a specialist teacher in their subject.
• Reforming the School Teachers’ Review Body to make it properly independent of government and able to recommend fair pay rises for teachers, and fully funding those rises every year.
• Funding teacher training properly so that all trainee posts in school are paid.
• Introducing a clear and properly funded programme of high-quality professional development for all teachers, including training on effective parental engagement.
• Urgently establish a standing commission to build a long-term consensus across parties and teachers to broaden the curriculum and make qualifications at 16 and 18 fit for the 21st century. This will draw on best practice such as the International Baccalaureate and ensure children learn core skills such as critical thinking, verbal reasoning and creativity.
• Improve the quality of vocational education, including skills for entrepreneurship and self-employment.
• Strengthen careers advice and links with employers in schools and colleges.
• Include arts subjects in the English Baccalaureate and give power to Ofsted to monitor the curriculum so that schools continue to provide a rich curriculum including subjects like art, music or drama.
• Expand provision of extracurricular activities, such as sport, music, drama, debating and coding, starting with a new free entitlement for disadvantaged children.
• Reform Ofsted inspections and end single-word judgements so that parents get a clear picture of the true strengths and weaknesses of each school, and schools get the guidance and support they need to improve.
• Implement a new parental engagement strategy, including a regular, published parent survey and guidance for schools on providing accessible information to parents on what their children are learning.
• Tackle persistent absence by setting up a register of children who are not in school, and working to understand and remove underlying barriers to attendance.
• Tackle the crisis in special educational needs provision, and help to end the postcode lottery in provision, by:
• Giving local authorities extra funding to reduce the amount that schools pay towards the cost of a child’s Education, Health and Care Plan.
• Establishing a new National Body for SEND to fund support for children with very high needs.
• Give local authorities with responsibility for education the powers and resources to act as Strategic Education Authorities for their area, including responsibility for places planning, exclusions, administering admissions including in-year admissions, and SEND functions.
• Redirect capital funding for unnecessary new free schools to help clear the backlog of school repairs.
• Tackle bullying in schools by promoting pastoral leadership in schools and delivering high-quality relationships and sex education.
• When the public finances allow, give disadvantaged two-year-olds an extra five free hours of early years education a week, as another step towards a universal, full-time entitlement for all two- to four-year-olds.
• Introduce a Young People’s Premium, extending Pupil Premium funding to disadvantaged young people aged 16-18.
• Review further education funding, including the option of exempting colleges from VAT.
• Support the education of children in care, extend Pupil Premium Plus funding to children in kinship care, and guarantee any child taken into care a school place within three weeks, if required to move schools.
• Safeguard the future of our world-leading universities and the wellbeing of every student by:
• Supporting science, research and innovation in universities, including continuing to participate in Horizon Europe and joining the European Innovation Council, as set out in chapter 4.
• Giving higher education institutions a statutory duty of care for their students.
• Introducing a statutory Student Mental Health Charter and requiring universities to make mental health services accessible to their students.
• Returning to the Erasmus Plus programme as an associated country, as set out in chapter 9.
• Establishing a review of higher education finance in the next Parliament to consider any necessary reforms in the light of the latest evidence of the impact of the existing financing system on access, participation and quality, and make sure there are no more retrospective raising of rates or selling-off of loans to private companies.
• Reporting international student flows separately to estimates of long-term migration.
• Ensuring that all universities work to widen participation by disadvantaged and underrepresented groups across the sector, prioritising their work with students in schools and colleges, and requiring every university to be transparent about selection criteria.

This was Schools Week - sounds like she doesn't want to change Charitable status, but would enforce Private schools sharing facilities - there has never been a proper checking system for this, some do lots, plenty do nothing

Would help if I added it !

Private school plansAnother area of notable difference is the stance on private schools.
Labour would levy VAT on private schools’ fees and remove their charitable status. Wilson wouldn’t do this, instead making schools “prove they’re doing lots to earn” it.
She wants more “partnership working” between private and state schools – “not just a tokenistic ‘we’re giving away a few bursaries, or doing a bit of charity work’”.
For example, she is passionate about broader extracurricular activities and giving pupils at least two hours a week of access to PE. Private schools could be compelled to provide sports facilities to neighbouring state schools as part of their partnership work, she suggests.

2 of my friends send their kids to public school.
One has a top of the range landrover and merc, couple of fancy holidays a year with private chefs etc....they can drop some of these luxuries and afford it. They'll still grumble about it though.
The other couple have very little disposable cash, both parents have had to take on extra paid work which they hate already to afford the fees as is, and have started applying for bursaries in preparation for the fees increasing.
I expect it'll be a mixture but with more of the former.

Sorry - to add by 'public school' I mean private school/ not state funded

How about making SEN children in private schools exempt from the VAT on their fees?

It was in an interview reported in the news - there’s a quote from it here

@Moglet4 Thank you! So it sounds like they believe schools will have to earn their charitable status rather than ride on the coat tails of those that take it seriously?

An NHS workers exemption has been suggested which seems to make some sense as on here so many parents seem to be NHS and using schools for the longer hours.

There has been talk about children with EHCP's VAT exempt.

The knock on there will be a massive rise in EHCP applications which will hit a system that is already collapsing. And negatively affect children in both state and private schools.

Sounds like it

I understand Richard Tice has claimed he is going to legally challenge VAT on school fees.

This was also covered on More Or Less on Radio 4 this morning where they fact checked class sizes, birth rates etc
https://www.independent.co.uk/news/uk/vat-institute-for-fiscal-studies-emily-thornberry-bridget-phillipson-labour-b2561025.html

I don't know how to post the right part but it was the last story

https://www.bbc.co.uk/sounds/play/m00202g3

I do worry that the IFS have massively underestimated the impact of this. There are so many people already taking their children out of DD’s year in September and that’s before this policy has been implemented. Apparently the local council are inundated with requests for state school places all of a sudden. From a phone call that one of my friends had, she was told that it was the seventh call that morning that the school admissions officer had taken and they’re swamped. It’s not getting reported though.

The IFS estimated a fall in numbers of 3-7%. They fell 3% last year alone. People don’t realise that families are making plans and switching already. Many preps are seeing a large increase in numbers switching to state at 11.

@MummyJ12 did you read this?
https://inews.co.uk/news/politics/experts-reject-claim-labour-private-school-tax-224k-more-state-pupils-3088681

Is it worth getting your group of friends together and contacting a newspaper like The Times who are taking a fairly neutral line on this. I do think it would be useful for journo's to do some FOI's to see a) how many pupils have been pulled out. Schools have to report this if it is a FOI, anyone can ask not just a journalist. b) the actual number of state school applications happening