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?

Sounds a bargain to me.

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.

There have been some corkers on here recently. One poster said her dc was being bullied for being posh and another replied that it wasn’t ’bullying’, it was ‘teasing’. Well that’s ok then.
Another said that sneering at poshos was acceptable as it’s ’punching up’, but not vice versa as that would be ‘punching down’.
These posters probably encourage their children to persecute any ’posho’ children who have the misfortune to be at the same school, since they seem to think it’s perfectly acceptable.

@elenuntis I'm merely pointing out that they benefit but are still taxed fairly to everyone. Which is maybe why people don't mind so much.

Which one of the examples you list are you counting as a 'nice holiday'

Yes they all generate different revenues but they are all taxed.

Medical insurance is "taxable" in so far as you pay income tax if it's an employment benefit - maybe IPT too. But medical fees themselves don't attract vat.

Also, i understand the argument about less revenue potentially but not quite.

Either you can afford the VAT.

You can't afford the VAT so you pull child out of school.

• you can now buy all the cars, holidays, extra curricular things you have previously been sacrificing
• you can afford to work less. If you do there is every chance someone will need to fill that role, creating employment, or you are massively inefficient and can cut your hours with noone noticing.

If you would plough the extra money into your pension to save tax a) that's too be encouraged so you can pay for your own social care
b) it is spare money (ie you're already buying the other stuff) so you can probably find a 15% increase.

I'm not saying that you won't be personally affected, but on an economic level it probably won't be as earth shattering as you think.

True. And teachers don't charge VAT either.

On a individual level it's considered a benefit or perk and taxed accordingly

I don't pay teachers.

I pay income tax on my income, including my medical benefit. I don't then pay tax again on that medical benefit.

No but you pay VAT on lots of other goods and services. Private education will just be one of those things as well.

Let's pay it on everything then....

Hmm private medical insurance is provided by your employer and counted as PAYE income. If my employer wanted to give private school fees as a benefit, I’d happily pay PAYE income tax on it.

hell if the govt wanted to provide private school and include the fees as PAYE income - where do I sign up for that?

not quite the same as VAT being charged on education.

As someone self employed I am surprised you think that someone working less automatically means more work for someone else. I am self employed and when I take on fewer projects there is lower economic activity on a net level - there isn’t always someone standing there with the right skills waiting for more work. In many cases clients either scale down their plans or push it onto someone internally for no extra income. I create new economic activity when I work more, I am not jockeying for a piece of the work pie. Same with many of the senior women I know who have reduced to part time - they contribute less, only a fraction gets passed to a junior (at a lower income so lower tax), and the company grows more slowly than it might otherwise

and as for economic impact, saving in a pension is not as good as spending on a macro level - ask anyone in Japan what happens when citizens save too much rather than spend.

You do realise I pay income tax (45% in fact) on the money that pays those fees. And a lot of people just pay medical fees and medical insurance - it's not all through employers you realise?

And the point was - we don't pay vat on medical fees. I'm not even sure why medical insurance is being mentioned.

Completely this - there is one of my role in my company internationally. Pre school fees I worked 4 days - now I work 5 days. Nobody gets hired or fired. They pay for expertise.

Someone mentioned it as something private that was taxable - most private medical insurance is provided as a benefit by employers.

My main point is that the govt is happy to take up private nhs capacity (I mean buying operations fro the private sector to cut waiting lists) but god forbid the same should happen to help state education. Instead we have a punitive policy that closes rather than opens options.

It is a personal comment, come on. With very little evidence in support tbh

In fact, medical benefits do have their own tax break. If the benefit scheme conforms to HMRC guidance you only pay tax on the cost of providing the benefit ie your share of the insurance premium. You don’t many tax on the benefit (ie the cost of any medical treatment you receive - a lot more).
that is a tax break in the true sense - potentially quite valuable benefits can be received tax free.

@Off99sitz if the government was paying to take up private school places as an emergency fix for children in need, that would be different as it would not depend on the material wealth of their parents.

Bikes = private benefit. Schools = social benefit. As taught to A level economics, since forever.

State school = paid for by taxpayer. Private school = even more social benefit because saves taxpayer ££££££. As agreed by every country in the world that doesn't tax education; some dozen or so countries and around 10 US states that actually subsidise education....but not the Labour Party, which knows better and wants to be the only country in the world to tax education.

This is widely peddled but inaccurate
Private education was not abolished in Finland. "For profit" education was banned. There are private schools (and fee paying International schools) in Finland.
Finland (in the early 2000s) ranked at the top of the education rankings.
However.....Finland has dropped 56 places for reading, and 79 places for maths
Finland is not an educational panacea!
https://fordhaminstitute.org/national/commentary/rise-and-fall-finland-mania-part-two-why-did-scores-plummet

And wouldn’t that be great @hamsterno1 - there is a crisis in education and the govt is constantly underselling children. Whereas health, oh we’ll do anything, principles not included.

@Labraradabrador i completely agree, which is why when you want to stimulate an economy it is always better to give money to those with lower incomes, because they are far more likely to spend it immediately, and create growth, rather than higher earners saving it, and removing it from the economy.

Even better, don't disincentivise workers like @Labraradabrador from actually creating economic value.

Growth comes from people creating economic value. Simply spending economic value which hasn't been created causes inflation.

When the value is spent does matter. But the creation is much more important.

Oh, and the reason the timing of the spend is important is simply to make the capital available for people to use it to create additional value.

It's all about the value creation, not about the spending.

Well that teacher is calling for the abolition of private schools. I can imagine what she put into those kids minds everyday. Surely those kids she teaches would grow up with resentment to say the least. The cynical me think this is less to do with equality and more to do with a radical left agenda.