How soon might a Labour Government put 20% VAT tax on private school fees?

[jennylamb1]

That really. Given that an election date has been declared for July, how soon might a Labour Government set their first budget?

Exactly.
Privilege includes: affording tutors to alow your child to go to grammar
Being able to afford a house in the catchment of a good state school
Using state but being able to afford exotic holidays and lots of extra curricular activities

The word "privileged" is bandied around towards anyone with more money/opportunities than the person writing the comment.

The problem is that middle class (usually those who work high paying jobs and work long hours etc) are paying higher taxes. But really reach keep their money offshore or use other tax avoidance schemes. Squeezing the middle leads to lower productivity, damages local businesses and is highly damaging to the economy.

Moreover if a family is well off, then their children are more likely to have a better start in a womb. That includes mothers eating healthy, having a better health overall, then once a baby is born, access to private healthcare (we used it extensively when my son was little), feeding better food to a child, better preschool provision, etc. By the time the child starts school, they have already benefited from ‘privilege’

Quite a lot of private schools do have plans to widen access. But these will be heavily impacted by VAT on fees.

@ThursdayTomorrow what’s immoral is seeking to deny a child an advantage in life just because the same advantage can’t be offered to every child.

Why is going to Oxbridge such as thing on here?!

Opportunity for boasting?

Well there are various options. In some countries there is no tax free allowance, so every person contributes, in other countries the basic rate is higher or there are interim rates (e.g. 30% at £30k). In the UK we have those with incomes in the top ten per cent, paying 60% of tax and one of highest effective tax rates in Europe for those earning £100 to £125k. It’s not a sustainable economic model.

As for the question of voting to disrupt your own child's education @Araminta1003, I think this is something that many, many private school parents are going to be massively struggling with. What are the choices? Vote Labour, and (depending on circumstances) face the prospect of either having to move your child out of a school they are happy in (including disrupting friendships, exam subject options etc), whether because you can't afford the fees any more or because your child's school goes bust - or at best, potentially watch your child's school get worse because of having to reduce fees to stay solvent.

So, the other options. Vote Reform? Preposterous. Vote Green? Well OK, but basically a protest vote. Vote Lib Dem? Maybe.

The other option on the table is to vote Tory. Which, given Brexit, Partygate, Boris etc feels like a ridiculous choice. But if you throw in policies about women as well, which are a real concern with both Labour and Lib Dem, then I almost unbelievably find myself at least considering voting Conversative for the first time in my life. I feel genuinely politically homeless for the first time, and have no clue yet who I'm actually going to vote for.

@Dibblydoodahdah that's not a great solution is it.

High earners pay 60% of the total tax because they have all of the money.

The easiest and best way to grow an economy is to give money to low earners, because they immediately spend it, therefore creating more jobs.

Everyone here has already said that their spare income goes on pensions, investments, foreign holidays over a certain level.

Countries with high taxation rates overall tend to have much larger investment in public services too.

The example of 30% on income over €30k would include Finland.

Coincidentally, Finland also has one of the best education attainments in the world.

Coincidentally, Finland does not allow fee paying schools

Just once more - I object to talking about any education as privilege at all - education is an investment and the EU, US and Australia all understand this.

Of course a private education is a privilege when it's not open to approx 93% of the population

In Finland Pre-school-nurseries are subsidised, here working parents pay up to £2k per child per month. Give the working parents the same benefits as in Finland and they will gladly pay more tax.

It’s also a matter of priorities. I know lots of very well off people who send their kids to state schools as they see no point in paying for education.

But yet we have made a unique decision to define it as a privilege in the uk.

as for number crunching income tax levels - this is best left to tax experts and tax economists but IFS is very clear that taxes need to rise on lower and middle earners to fund public spending, and this is a huge area of political dishonesty.

It's the principle that is the issue here.
Private schools don't pay VAT if they have charitable status. They also get business rates relief, can claim Gift Aid back from the government on donations and don't pay inheritance tax on legacies.

This means the rest of the population are subsiding them through their taxes which are paid out to these enterprises or by making up the shortfall from their tax relief.

They are not charities, they are businesses and should be subject to the same taxes as other businesses. Many (probably most although I'm sure not all) create a 'charitable' element purely for the tax relief and benefits this affords them. I'm sure there are many other businesses out there who do more charitable work that don't benefit from the same status.

The fact that the education system is failing SEN pupils is appalling but it is a separate issue that needs fixing for everyone, including the majority who can't afford private schooling.

@potionsmaster "Quite a lot of private schools do have plans to widen access."

I wonder what's been stopping them all these years......

It’s quite true that sixth formers are leaving independent schools to go to comprehensives to try to benefit from contextual offers from Oxbridge - no financial or other reason. People game whatever system is put in place.

The thing is there are many people in the UK paying the tax rates of Finland but not receiving the level of public benefits. In fact, those in the 60% effective tax band also lose tax free childcare and 30 free hours. This can push them into an effective tax rate of 100%. Are you surprised that they don’t want to pay any more tax?!

You are right that countries with higher overall tax rates usually have better public services. I’m all for that. But people in this country wrongly assume that it would only be those on higher incomes paying more. It wouldn’t be.

@CurlewKate nothing's been stopping them. There are many schools that offer significant numbers of bursaries and do a lot of community partnership work.

I'm delighted the upshot of this debate is a Finnish tax model and excellent nursery provision.

They have also sorted out the whole non-dom issue and charge inheritance tax on all estates at a progressive rate. It's also signed up for the EU anti-tax avoidance legislation.

Bring it on.

•	12.64% on income up to €20,500
•	19% on income between €20,501 and €30,500
•	30.25% on income between €30,501 and €50,400
•	34% on income between €50,401 and €88,200
•	42% on income between €88,201 and €150,000
•	44% on income above €150,000  

Non-residents in Finland are subject to a flat income tax rate of 35% on income sourced within Finland.
The Finnish state pension is €1900 a month, more than double the UK's, and is means tested and assets taken into account.

Private schools not paying VAT has nothing to do with charitable status. All education is VAT exempt and private schools don’t pay VAT whether or not they are a charity.

The whole subsidy argument is nonsense. Private schools save the taxpayer money as it would cost £7k per child to fund a state school place. No one is subsidising them.

My DC’s school has been a charity for 100’s of years. Who actually receives the profits if it changes into a profit making enterprise? Also, it undertakes many charitable enterprises such as sponsoring a state school that was failing. What would you like to happen regarding this?

My DC’s school has been a charity for 100’s of years. Who actually receives the profits if it changes into a profit making enterprise? Also, it undertakes many charitable enterprises such as sponsoring a state school that was failing. What would you like to happen regarding this?

But it won’t have to change into a profit making enterprise - as you point out VAT and charitable status aren’t related.

What about replicating the perceived advantage from private school into the comprehensive system ? Of course this would cost money, but the benefits throughout would outweigh the costs in so many different aspect of society …

I don’t see any plans on how to improve outcomes for pupils & teachers. Not sure what the 6500 additional teachers will help with when so many are leaving the profession.

Even within mainstream schools, there are so much inequality in term of the quality, inclusivity, extra curricular activity & quality of school meals … even in the same local authority, between schools who are barely 2 miles apart. But this inequality is not even talked about.

From our own experience, the way mental health issues & needs have been handled, many families had little choice but to fork thousands of pounds to just ensure their child could go to school, many others chose online learning, or to home-ed and many others are struggling… and that is just too many people being failed - compared to the lucky (hopefully many) receiving adequate support in mainstream. (I think primary schools to handle this better than secondary schools.)

The more I think about it, the more I am finding the policy divisive. Pitching people against each other never ends in a good outcome & I’m disappointed with labour policy on this.

I truly hoped for a party that would seek better opportunities for children and young people - including tackling child poverty. Nothing so far.

I am totally perplexed as to how other countries do education. In Croatia education if free for all, everyone attends their local schools and then they go to uni (depending on whether or not a child passes the entrance exam). Sen is amazing and children are given the therapist as soon as they need one.

There is no highgate school, ucs or any other top tier school and equally no oxford or Cambridge - its all equal. There are many many poor people especially now that the country has changed its currency to the euro.

However, when children finish their school (which they start at 6/7 btw) they can compete equally with any English students regardless of which school or uni they went to. Most children now days speak English almost fluently amongst other languages - many know at least 2/3 languages.

The country is not as wealthy as England (considering the not-so-distant war) SO how on earth do they do it and we struggle so much just to educate our children.

My children were in a state school where it was awful 30+ in a class with bulling and no teachers (the headmaster admitted he just couldn't afford anyone experienced)… my child instead of developing education developed severe anxiety and we had to suffer to get him out and into the private school. My child is so much better now but we are still suffering the aftereffects of what happened.

Why can't we get the education right for our children?.. Its just awful and all the parties are the same promising the world delivering excauses! Shameful!

Well as someone about to go into the £100k tax band I would be a lot better off. And that’s the thing, the people paying the highest rates of tax in the UK wouldn’t be worse off in Finland because they would actually receive something in return. One of the issues with this VAT policy is you’ve got people already paying the highest rates of tax who then end up paying private school fees because the state lets them down and then they are told that they are going to be paying more even though they are receiving nothing in return. Is it any wonder that they are pissed off?!

And that’s not the only reason. There are some people who genuinely can’t afford the increase. They have been contacting their LEA’s with regards to a state school place and many have been told that there aren’t any. Some of written to their local Labour MP who have told them that they can afford it because they have managed through the cost of living crisis. Clearly oblivious that this policy could be the thing that pushes them over the edge.