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?

A friend of mine told me that the state primary her son attended told her that they couldn't cope with his special needs but there was no alternative state provision. She moved him to a private school with the help of the grandparents but can't afford the VAT rise. The other child is in state education. Removing children from private schools with a risk of no net gain in tax seems pointless espe.cially when it will damage some children. It is pure ideology.
It is impossible to make every child's education equal. Children have different needs. Some children go to schools in better catchment areas, some children are more able, some children have special needs, some children are born at the start of the academic year, some children have more space at home to learn, some children have tutors, some parents can tutor themselves.
Getting rid of private schools does not change this.

Apparently Labour are not going to charge VAT on the boarding fees at state boarding schools.

https://www.telegraph.co.uk/money/tax/private-school-tax-raid-labour-exempt-boarding/

The change required to the legislation is incredibly simple. I don’t think they’ll bring it in retrospectively. But it may start from the date of their first budget. Hopefully they’ll be helpful to schools and start it with effect from the beginning of a school term.

I don’t agree with demonising those who chose to spend their hard earned cash on education. It upsets me to think that so many people are so hostile towards those of us who have had a bad experience in the state system and so have pushed out all the stops to go private. We are fortunate to have that option, but I don’t get why we’re judged for making that choice. Surely all good parents try to do the best they can in their individual circumstances. Sometimes that means appealing, moving house, tutoring, homeschooling. All valid options which arent judged in the same way.

https://inews.co.uk/news/politics/experts-reject-claim-labour-private-school-tax-224k-more-state-pupils-3088681

No one has been able to refute the Adam Smith report though, have they?

Which points out the piss-poor failings in the original IFS report (their 3-7% number and the assumption that parents who move their kids from private to state will spend their money on consumer goods instead). That 5% is highly optimistic, 25% can't be discounted, and 10-15% means the policy won't make any money.

Just in

https://www.theguardian.com/education/article/2024/jun/06/labours-plan-for-vat-on-private-schools-highlights-inequalities

@Beouf not actually correct as I know teachers who currently teach in the state school that I would move my child to. They almost had to close not so long ago as they couldn’t cope financially, we have donated on a number ours times to our local school funds due to our belief that if we can we should help. I am also sure we are not the only ones that have done that. However, if we are forced to pay these extra fees, I will not donate any more and will put my children into a state education. According to the law the school will have to make provisions for my child and that will cost money and staff time. Sadly there is only so much the schools can stretch as they are already stretched to the limit where we live. The reason why I would stop any donations would be because of the government and those that oppose the privileges that I can provide to my children which is currently stretch just enough to pay for it and give those states schools ability to help those who can’t or won’t stretch.

if I could I would even go further and make provisions for more families to be able to go private and at the same time allow those who really cannot afford it to have smaller classes, better teachers, better teaching conditions and more help - therefore enabling better quality education all around.

the plan that government has right now is utter rubbish!

@twistyizzy Yes this struck a chord with me in that Guardian article;

Absent from this discussion is the fact that most SEN children in the UK are already attending those state schools that better-off parents are now worried about their children being forced to attend. SEN children from the poorest backgrounds have less support and harder lives outside of school and will continue to be more disadvantaged regardless, but they don’t exist in this conversation. If more middle-class voters are forced to confront the inequalities of education, this is surely a good thing for everyone.
Isaac Woolley
Bristol

@Oakandashsplash how?

Yep I agree with her that SEN is woefully inadequate in the state sector. Hell, every aspect is woefully underfunded. The point is that this policy won't solve this!

it’s labour that needs to confront the reality of how the poorest children with SEN are being failed - im well aware and this policy is absolutely fiddling at the sidelines.

SEN child in state - every single bit of help, bar access arrangements, that she has had since reception has been at my expense. From colour overlays and funny shaped pens, to laptops and 1-2-1 tutoring.

School have been very clear that they are overwhelmed and have no time or resources for children who are well behaved and not completely failing.

Failure to meet potential, failure to focus in large, disruptive classes, failure to get any of the things detailed on the SEN Plan... that's not something that seems to be a focus let alone a priority. Friends in other schools with similar profile children have exactly the same.

You either need to fight for and have time to fight for an EHCP and stay on top of it being delivered, or be able to provide the needed help externally at your own expense.

@viio

> as many above have already said this is not the answer to your child’s improved education and is not for anyone’s benefit, I therefore have no idea why isn’t everyone fighting not to have this implemented

Unfortunately because the vast vast majority of people don't think this will affect them so don't look behind the headline. Attempts to explain are often derailed before they begin by the 'rich people whinging' narrative. That's fair but doesn't justify giving one of Labour's major plans zero scrutiny.

I've not seen the media challenge Labour using financial figures. The Adam Smith report is thorough and clear: it's a huge risk. If the gamble fails Labour have suggested no other ways they might find money that state schools badly need and they will have made the situation worse. And £1.4bn wouldn't be enough, or fast enough, anyway.

The report is long but the conclusion on page 30 is a good summary: https://www.adamsmith.org/s/Short-Term-Thinking.pdf

Perhaps a goal could be: get the media to read the Adam Smith report conclusion?

Just to highlight how little this is about raising money for schools and how much it is about class war.

Makes it worse, makes everything worse

My dc have been discussing labour coming in and making private schools more expensive. Even my 9 year old asked if that just meant that our local outstanding secondary state school (strict church attendance required which we started last year for him to have the option) wouldnt be able to fit everyone who wanted to go there in!!

PMSL at all those mythical dentists and doctors who will be no longer working overtime and offering the poor NHS extra appointments.

The only 2 medic families I know who privately educate fall into the following categories:

• grandparents paying fees
• doing shitloads of private work, and therefore hardly benefiting the NHS

Two consultants without family money are no longer in the "wealthy enough to do what they like" category in the South East. They are generally paying off student loans, high mortgage costs, and childcare (if not nursery, then holiday and wraparound cover, which is worse for private schools). If you're over 100K you have a double whammy of no childcare support and a stupid marginal tax rate.

If we are working less, it's to reduce the tax implications.

Interesting - I wonder where you get your information? Sounds as though you may be a medic yourself? Have you engaged in the private school community?

5 doctors in my two kids' year-groups alone, near Southampton, of which I know 3 do mainly/entirely NHS work. 3 work FT to pay the fees and it's marginal; they might keep working but they really fancy 3 days/week. All are in dual-income families where both are higher-rate taxpayers.

In the parents' campaign we also have dozens of nurses and other NHS workers (physios, radiologists, you name it) on lower wages. Typically they are the second earners; it's the joint income that makes independent school possible, but it's also the joint FT work that puts a strain on the family. Who forgot to unload the laundry? etc.

so (1) counter to the millionaire stereotype, these are normal families with well-paid, unspectacular, demanding, useful jobs (2) take away the fees and it gives them new options.

You're absolutely right about the tax rates and disincentives over £100k, plus childcare cliff-edges which are bonkers. You need a real, serious reason to work in that range. Do you see the inconsistency between (1) "school fees are expensive and out-of-reach for most" and (2) "everyone who can afford school fees is so rich they have money to spare"?

Childcare: our day school does 0745-1830 every weekday included in the fees, so that's quite a help with the wraparound care. Admittedly leaves you with the longer holidays. Just one of the many perversions of this policy: what serves as 2 hours childcare for us (the timetable finishes 1625) will become VATable, whereas after-school clubs at state schools won't be. So they say.

@shockeditellyou - there are plenty of good state schools in the South East and obviously house prices are higher, so your NHS doctor is more likely to send their DC to a grammar or an outstanding state comp (via catchment, once they have a consultancy job).

The issue is in the poorer regions with poor quality state schooling where there are cheaper private schools and NHS doctors simply won’t go there if you take that choice away from them! That is what this whole argument is about.

“My dc have been discussing labour coming in and making private schools more expensive. Even my 9 year old asked if that just meant that our local outstanding secondary state school (strict church attendance required which we started last year for him to have the option) wouldnt be able to fit everyone who wanted to go there in!!”

@Underparmummy - that is great that you have a political 9 year old! How lovely! My 10 year old is too. Bodes well for the future.

Each and every one of us with DC in state facing transition should absolutely be worried about this.

They can’t, parliament will be in recess. They also need to address tricky issues like all the independent specialist schools and children with SEN/ASN for which there is no consistent definition across the UK.

They now also need to define why state boarding school (where parents pay for the boarding element) is exempt but independent boarding isn't exempt

@MisterChips There is no inconsistency between "(1) "school fees are expensive and out-of-reach for most" and (2) "everyone who can afford school fees is so rich they have money to spare"?" - by definition, if you can afford north of £20K per year per child for private school, you have £20K a year spare, and can commit to it being spare for several years, that you aren't using for anything more essential such as housing costs or feeding yourself.

I'm in Cambridge and the proper money is now in pharma and tech - and this is reflected in housing costs which are substantially higher than Southampton. My experience is from my consultant colleagues in my MDT and clinics. Funnily enough, not one of our nurses has children in private school.

I also don't believe that people who work in the NHS are automatically eligible for sainthood and somehow deserve special exemption from VAT on private school fees because their job passes some kind of social sniff test! If we really care about stopping this category of people from working less for the NHS or other socially acceptable jobs, remove the tax cliff edge which will affect everyone, not just those with children, and will have a greater lasting effect.

But there is no plan to reform income tax to avoid marginal tax traps is there?