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?

Does anyone have any insight into how the process for drafting and implementing the legislation would work from a timing perspective? I am an expat, so really no clue how it works.

i know they have said it would be implemented immediately and applied retrospectively, but then it also feels like there is a lot of work to be done figuring out the details of what would be vat-able, which institutions are included, what exceptions (students with an EHCP for example)

my biggest fear is chaos if they try to implement this quickly at the expense of thinking through the details. Obviously hoping they reconsider entirely, but the worst would be some half baked policy that creates unnecessary uncertainty for schools and parents. Given the drop in enrolment we have already seen just on the anticipation of this policy I am worried that general uncertainty and a rushed / poorly executed implementation could really destabilise the sector.

Also, think about families with 3 plus kids in private. 3 kids at 25k a year - 75k. Yes you’ve got to be wealthy to afford that but that might be the very upper limit of do-able for a family. Magically finding another 15k a year on top might be impossible.

Lots of people don’t seem to understand there is a big difference between families that are already seriously stretched to send their kids private, and those on massively high salaries for whom several grand is neither here nor there!

@Labraradabrador I genuinely don’t think they give a shit about thinking through the details. They will want to rush this in by September I reckon, and not give two fucks if it causes chaos in either the state or private schools. It will be a case of implement first, worry about the details afterwards.

My son has ASD/ADHD, other son ADHD and my daughter ASD all are doing absolutely fine in (different) state schools in a not particularly nice part of a big city. Honestly it's not that bad out here, lots of us survive and thrive! I was worried about the big school thing but DDs school has 9 classes in her year and she is cracking on fine.

With respect, that’s great for your kids, but there’s a big spectrum out there and people like me who’ve chosen independent for their kids haven’t done so lightly. We’ve done it because that’s the way to get their needs met.

It would be introduced in the King's Speech which is going to be around the 17 July then in either the Autumn statement or March Budget, then there is a debate & vote in Parliament before it goes through to the House of Lords for them to vote, it will either then be passed as law or sent back for amendments, I would imagine it won't go through until Christmas at the earliest & they will give a date after which the VAT will be charged.

They will still need to get some words down on paper. I’m sure it will be poorly thought through - everything they do will be that - but they still have to work out what to tell the lawyers to draft.

here we go

i don’t think it will require primary legislation? Just a change to the relevant VAT regs

They won't rush it through for next year but I hope for the year after. Another time to make plans, state schools are very used to adapting numbers due to fluctuating birth rates and the peak years of the mid noughties has dropped. In fact the drop down after COVID must be reception kids.
Only 5% of kids go to private schools until six form (and then the numbers are swayed before definition) and most of those are in London, many London state schools have low numbers so can absorb any drop off.

And the kids with SN? Nice and simple for them, is it?

My DD wouldn’t be at private school if we had super selectives locally. But they are very rare. We don’t even have grammar schools, just some of the worst funded secondaries in the country.

With respect most of us don't have a choice and all this means is some more people will be in the same boat as 95% of the country with ND kids.

And how does that help? More pressure on a system under strain benefits who?

The question is the soonest they "might" do it. The earliest VAT might become payable is the date of announcement. They have to be elected before they can announce it. The relevant legislation might not be passed until the next budget, but they can backdate the start date to the date of announcement. So if they announce it in early July, i.e. shortly after being elected, it might be payable on fees from this September.

Can they do this? Has this ever happened before? How does this work if you’ve already paid fees without vat and then they legislate - you get another invoice for the VAT?

Although I can see that they might want to pass a bill fairly quickly, I think they'd be mad to have it take effect before September 2025. There are areas where almost every secondary school is full, and so even if the numbers are small, they will struggle to find spaces for additional pupils mid-year*. If they wait until September for implementation, then there's some planning time. LAs can then encourage people who will be wanting state school spaces for September 2025 to apply in good time (with an exception to the usual rule of "if a place is offered it must be taken up within a certain time"), so that if there is a need to add an extra class they can do that. The other problem will be where a private school goes under, particularly if there are no other local privates which can absorb the remaining pupils.

*We can presumably expect lots of appeals "because it's the only school that offers Latin / 3 languages", too.

The Tories drained the schools of cash, over time this will be improved.

I see lots of autumn term invoices going out on 3rd July.

7th July -like the Tories cancelled Building Schools for the Future on Day 1.

it is great that your children are doing well (I really truly mean that), but our indie has a large cohort of Sen children who have moved to us from the local state schools at or nearing the point of crisis. Everything SEN is in absolute shambles in our area- every step of the process is a fight, none of the statutory deadlines ever met, total lack of provision on any level. I am sure some state schools do better than our local ones, and I also know that some SEN children navigate successfully, but surely as a Sen mom you appreciate how precarious it can be at times. I have a Sen child who is settled and doing well in their current environment, and I cannot assume they would adapt well to the schools that so many like my dc have fled due to lack of support.

How so?

It would seem very unreasonable to apply it to fees people are already committed to - which is probably the case for next term's fees already.

I don't have kids in private schools but I take no pleasure in any kids having to leave their school or friends.

If this was introduced I think they should announce it first then do it from reception so people know the score before their kids start and phase it through as those kids move up through school.

I can't see how more kids joining state schools is going to improve their standards? Schools vary in size already and it's not the bigger the better.

This is quite useful:https://www.farrer.co.uk/news-and-insights/vat-on-school-fees-qa/
to be be able to apply VAT from the date of announcement, they presumably would have to be able to say how the definition of eligible provider is going to change in that announcement, and I’m not sure they they know that yet.