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?

"more frustrated remarks directly in response to some private school parents making baseless and hysterical bad faith statements that the only reason anyone would support the tax is out of jealousy"

OK, let's step back a bit. @quantmum or anyone else in favour of this policy: can you say why you actually think it's a good idea. Is it because you think that it will raise a significant amount of net revenue which will in turn improve state schools? Is it 'because private education is a privilege and should be taxed' - regardless of whether that tax will actually raise a net sum of money? And if another reason - what?

You said that you had seen very few ad hominem comments. Maybe you just choose to ignore the references to toffs, poshos etc because you think it is acceptable to abuse “rich” people. As far as general arguments go, this thread was started by someone who quite justifiably wanted to get an opinion of when VAT may become payable but then it was hijacked by people who wanted to shout loudly about how they support the policy. They could have kept quiet or posted on a different thread…so it does seem spiteful to many of us. We’re criticised for even asking the question and are basically told to shut up and pay.

No, I'm saying the dividend tax loophole closing was not to do with covid and your accountants should have been advising you that it would get closed at some point (as it has).

The dividend loophole was before that, yes. But the hike in corporation tax is directly related to covid.

To play devil's advocate here, the situation I described above with my teacher friend, which I would hope everyone would agree is truly awful, is at a "good" (according to ofsted) school. She has said, she just can't teach, it's hopeless. So I'm not sure relying on an ofsted rating is the way to go.

Ah, sorry, yes ok. All businesses are paying for covid, even if they didn't claim anything, I agree. Do make sure you are claiming all the exemption you can as a small business!

@quantmum

>in response to some private school parents making baseless and hysterical bad faith statements that the only reason anyone would support the tax is out of jealousy

Sort-of. I have not seen the word 'jealousy' used.

> suggesting that they are uniquely hard working and self-sacrificing,

I've not seen that either. I've seen posters forced to reveal family and financial details to defend their hard-made choices.

> and saying those who support the tax want poor innocent children to suffer as a tiny number might need to have the same schooling as 95% of the population at a time of glaring child poverty and rampant structural inequalities.

That does sometimes seem the case... not quite those words but suggesting that dragging everyone down is somehow a good thing. Posters have been called out on it a few times and disappeared.

The word 'spite' has been used and whilst it's a bit strong it is somewhat valid. There are some comments with the sentiment 'yeah tax the rich, you privileged people deserve to pay more' and 'poor diddums' etc on this thread and plenty elsewhere.

People saying that have not looked at the policy any further beyond the headline - they're already voting for it. When challenged by replies on here they disappear.

After 26 pages there are several outstanding issues raised that have no answers. Mostly about finances. To repeat it yet again, the £1.4-6bn from the IFS is a GAMBLE based on a GUESS on migration based on gradual fee increases over years rather than a huge (they assume 15% net) jump. It does not consider SEN. Or last year's inflation. The policy is gambling on 7-10% migration. If it's actually 10-15% migration then there won't be enough VAT collected to pay the £~7k per kid extra in state school. And nothing for any SEN resource needed by teachers or the councils.

Whilst I appreciate idealogical views there's no point in following a bad policy if it just won't work even if luck is on its side (£1.6bn is not enough) and if not will cost money overall.

"If the rich had to use state schools then state schools would improve."

This is most unlikely. File under "something you read in the Guardian".

• there are 2m upper quartile earners in state schools today. What do they do? Buy catchment areas and tutoring. Good for them...but don't be expecting 40-130k (depending who you listen to) ex-private school kids to behave differently
• there's no evidence for this, anywhere in the world. There are just good, decent and bad schools and, unsurprisingly, higher earners are better at distancing themselves from bad schools.

more here

Bright kids shouldn't be expected to help bad schools (substack.com)

"uniquely hardworking and self-sacrificing". Nobody is saying "uniquely". What we're saying is we work harder compared to our peers.

• There's an imaginary version of myself using taxpayer-funded schools and working less hard / paying less tax, and that's the relevant comparison
• There's an imaginary version of every top-quartile state school family that "could" choose private school by working a bit harder and going without, and that's the relevant comparison

"those who support the tax want poor innocent children to suffer as a tiny number might need to have the same schooling as 95% of the population at a time of glaring child poverty and rampant structural inequalities."

• your "tiny number" is 20-135k depending who you talk to
• it's not "the same schooling as 95% of the population" given the top ~3rd get to choose their schooling by buying into catchment areas, and many private school families haven't done that;
• "glaring child poverty" has nothing to do with any of this, except that it will be become even harder for the state system to do anything for schools in poorer areas. Again, the impact of this tax is felt within the peer group of higher earners
• "structural inequalities" anyone caring about this should be calling for taxes on those higher earners that could pay towards their schools but don't, rather than those that already pay multiple times for education they don't use.

VAT is not charged on many things deemed essential or in the public good. Education is in the public good and so has been exempt for a long time. Why should VAT be added to private school fees and not other forms of education?

My 'leap' makes complete sense if your local options are the 20%.
Or where the good schools are oversubscribed.
Or in the portion of the 80% that don't have enough resource for SEN. After you've been accepted for a costly EHCP assessment. And spent months battling to get it. To then stretch the school even further.

> For parents who deliberately choose state schools and don't want their children to attend private schools - for whatever reason - state schools are clearly adequate.

That's quite a leap. No. Many parents do not believe their state school and its surrounding support system are adequate.

you only have to look at the number of young adults not working and on disability due to mh issues - who often also have ASD etc diagnoses to see clearly that schools are failing children with SEN (and so is the nhs).

but the nhs uses private provision for health to expand capacity, but for education, it’s somehow less essential and important and no principles must be compromised.

So nobody's actually going to answer the question of why they think this is a good plan?

This comparison with the NHS is what I find most troubling. The difference between their approach in dealing with health and education is stark.

When it comes to health, they talk about the necessity of large scale reforms, improving efficiency, the importance of waiting several years until expecting to see results, and the need to work WITH the private sector.

I'm seeing the complete opposite approach to education, where the implication is that a rapid injection of (a small amount of) money is going to solve problems quickly. And of course, anyone who is on these threads will be aware of their attitude towards the private sector already...

So just to clarify…
Buying swimming lessons, dance lessons is acceptable?
Buying music lessons (outside of a school) is acceptable?
Buying tutoring, Kumon Maths etc is acceptable?
Buying wrap around child-care for before and after school is acceptable?
Buying weekend schooling eg., Islamic, Jewish school is OK?
Buying an expensive house is a good catchment is allowed?

But paying for the Mon-Fri daytime education makes Private School parents evil social-climbers?!?

Is it Ok to get them a bike to learn to ride on or does that make us privileged twats as not every child in the UK can afford their own bike?
What about State schools parents that pay for music lessons, sports etc within their school?

Where exactly are you drawing the line on what people are allowed to spend THEIR money on?

Add in:
Buying a larger nice house for your kids to grow up in is acceptable
Buying higher quality food for your kids to eat is acceptable
Buying decent holidays and family memories is acceptable
Buying private medical insurance is acceptable
Buying 4 years of university tuition fees for your kids is acceptable
Buying 4 years of rent at university for kids is acceptable....

This is a spiteful and egregious policy designed to catch the headlines and win over the champagne socialists.

I suspect, legally, it will fail. I suspect legally it will be unlawful to single-out private schools as 'education' but not every other form of non-state education (see non-exhaustive list above).

I suspect Starmer - as a lawyer knows it will be unlawful but continues with this faux-socialist rhetoric to keep the party loyal with him.

I have a vested interest: my brother is a senior NCO in the RAF and his kids have just started at a private boarding school (the state options were unworkable) in advance of a 3 year posting to Germany. Financially they can just about make this work, 20% extra is not possible, along with many of his colleagues, they will leave the RAF if the fees become too much.

They could of course just have less Netflix and Starbucks....

Presumably, they will use the vat to plough into state schools

Yes please

it will likely be of negative value:
more kids will require state school places;
schools will be able to reclaim VAT on good and services (retrospectively too);
less kids will go to private school = less revenue;
many parents work extra to pay for fees = this will be reduced if kids aren't in private education = less over-all revenue for the treasury.

And the elephant in the room is there are 2000+ vanacines in teaching in the UK - its fantasy to think that labour will recruit another 6500!

Highly unlikely this makes any money.

If you want more money for state schools, you'd raise it in a more predictable, less complicated, less controversial way. If you want more money for state schools, get everyone to pay (like in Finland); or at least target higher earners that actually use state schools rather than just higher earners that save the taxpayer ££££ by not using state schools.

There are 2m upper-quartile earners using state schools, many of whom could afford independent school, maybe working a bit harder or saving elsewhere. Why are they off the hook for fixing state schools.

The dead commitment to this policy indicates that you don't really want to raise money for state schools. There's some other motivation.

I have no idea why they would do this. I'm a lifelong labour voter but can't they see that educating those children in the state system would cost much more than the 20% VAT?

I think this teacher explains her frustrations well here. And I agree with her that ultimately we should would out how to make it 'fairer' but that is not this 20% VAT twaddle.

https://metro.co.uk/2024/05/29/a-state-teacher-labours-private-school-tax-plans-fill-fear-20931183/?fbclid=IwZXh0bgNhZW0CMTEAAR0MlwApKsLZTFgOXyCbML66aQRgQ-zpD7UzFVc2oi9NqwaDr7n4wkikDsM_aem_AYRbz16Ak0Vuk5NPbce8bfIJ25Oxm_X1SubxJJl_SnuH7LOdXn01K5yIpya4yygzOm61Wcmzx2O2ZqMNpv05c3lH

@elenuntis

Buying a larger house - stamp duty
Nice holidays - vat
Nice food (luxury snack food and food in restaurants) - VAT
Medical insurance- taxable benefit.

But paying for the Mon-Fri daytime education makes Private School parents evil social-climbers?!?

Is it Ok to get them a bike to learn to ride on or does that make us privileged twats as not every child in the UK can afford their own bike?

This type of post just makes private school parents sound a bit .

You’re perfectly entitled to pay school fees if you want to. They will simply have VAT on them, much like those bikes you mention.

Or they could claim CEA.

the point was about how privileged lifestyles advantages kids in many other ways that as a country we're happy to turn a blind eye to b ut we froth and fervour over the so called privilege of education...

and the things I listed don't necessary equate to a greater receipt for the treasury...eg, a week TUI all-inclusive will generate less revenue than staying at a friends cottage in Cornwall or their 'little place in France'

They already are and paying c£15k on top of CEA for 3 kids...