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?

You were talking about a scenario where a state school could reclaim all of its input VAT? How do you square that with your worked example?

The worked example is me trying to make a point to you ... that it does matter that state schools have unique tax breaks. It enables them to spend a greater % of their income on teachers and books, compared to independent schools.

Yes and my point is that the state is paying for the state schools anyway so whether they give them tax breaks or not is neutral to the state.

@MisterChips are you aware that there is a huge difference in funding per child between state and private school DC? That is a much bigger consideration on the relative advantage to the child than what percentage of income can be spent on teachers and books. It is the absolute figure that really matters. Weak argument.

@ForlornLindtBear - they haven’t committed to extra funding for our children though just breakfast gruel and some counselling to recover from it.
When the reality is that the kids who should be in breakfast club barely make in on time on normal days so how are they going to suddenly be there at 7.30am for eggs and beans on toast? The effort needs to go on them not all kids. Schools should provide childcare that normal working people pay for, not free breakfast club for all.

I don't know what you are talking about. I was talking about differentials between state and private in absolute funding levels to pay for teachers and books. Nothing at all about breakfasts and who gets in on time!

The state gives with one hand and takes with the other. It can set the level of funding (whether per pupil or total) net of taxes wherever it likes.

The example I just gave is worth £400-600k per child at state school

I'm sorry but would you repeat the example? There are apparently about 8.5mm children in state schools in the UK. £600k per child would be over £5 trillion, which is more than double the UK's annual GDP.

Worked example: government allocates £8k headline funding, sets tax policies to require £1k of various taxes. Net £7k available for education. Net cost to government £7k.

Or: government allocates £7k headline funding, sets tax policies to exempt schools from tax. Net £7k available for education. Net cost to government £7k.

Where are we disagreeing?

This sub-thread started when @Lavendersquare said it's not fair independent schools get a ~£100 per pupil tax break on biz rates. Which I said needs to be compared to the~£400 per pupil tax break on VAT reclaim for state schools. Which you say doesn't matter because it's government right/left pocket, and I'm trying to show you that it does matter because it's £400 of books and teachers.

And I'm right, and as usual when we get into the detail, somebody now wants to switch topics and say it's about comparing what state schools received for free from taxpayers with what private schools have to fund from after-tax income, or parents have to pay for on top. That's the real elephant in the room - the assumption that state school resources grow on trees.

Anyway, if I can take it you stand corrected on the £400, lets' go:

• minus £100 on biz rates
• Plus £400 on unique VAT reclaim tax break
• Plus LA overhead
• Plus DoE overhead, strategy and R&D which I'm sure are "terrific value" for the several £billions they spend annually
• Plus OFSTED
• Plus school transport (for anyone, I think, over 3 miles)
• Plus absence of bursary and partnership expense
• Plus capital costs
• Plus cost of land, or opportunity cost, however you consider it

So the £7.6 to £16.7k funding gap you're bummed about, which I think is none of your business, starts to narrow considerably taking all those things into account. It's probably nearer 1.5x than 2.2x.

Oops. £400 per child per year.

Who is assuming that state school resources grow on trees? No-one said that. I stand corrected on nothing. And who do you think you are to decree what is my business or not? Your posts seem to be becoming increasingly pompous and are very much channeling 'angry (little?) man'.

“I don't know what you are talking about. I was talking about differentials between state and private in absolute funding levels to pay for teachers and books.”

I absolutely agree that state school funding is inadequate and needs to go up.

However, in reality private school parents are already subsidising the state education budget. Because they are not taking any money out of it. So now you are asking them to subsidise it even more? By another 20 per cent of what they already pay? And gaslighting to say they get “tax breaks”. It just makes 0 sense.

I would just like some more state school funding for my DCs. It is not at all complicated. And obfuscating and going on and on about fully funded pies in the sky is not going to confuse me. But I guess the VAT policy does - it is very confusing and I guess that is the intention. Too confusing for people to actually understand what the hell is going on here.

Private school parents are essentially like international students in universities, subsidising the rest of the uni budget. No amount of going on and on about tax breaks will take away from that.

"Who is assuming that state school resources grow on trees?" Everyone who engages in this debate who makes a direct "it's so unfair / ooh tax breaks" comparison between state and private school funding, without noting that there's a fundamental difference of principle. It's not because of private schools that state schools are underfunded (if we agree they are, which many don't, noting how many do perfectly well on the money they have), it's because (1) the government bans them from charging top-ups and getting parents to pay and (2) the government decides how much of taxpayers' money they get.

"I stand corrected on nothing." er...seriously? Do you still say that a £400 tax break for state schools doesn't mean £400 for books and teachers? Can you explain? Why wouldn't you just agree and let it go?

"And who do you think you are to decree what is my business or not?" That's like asking why I decree it's my business, not yours, what I watch on telly this evening. Independent school fees are their families' business. The clue is in the word "private". State school fees are taxpayers' and voters' business. Who are YOU, or the IFS, or Bridget Phillipson, to "decree" it's anyone else's business?

If schools were charging top up fees, then they really wouldn't be state schools free at point of access now would they? By definition they would be quasi-fee paying schools.

I didn't say anything about a £400 tax break for state schools not meaning more books and teachers! I made the point about an absolute comparison with funding of different types of school being more pertinent to the majority.
You must be confusing me with one of the many other posters who disagree with your rhetoric.

You have no authority in saying whether state schools are adequately funded or not because you have elected not to use them so have no first-hand experience of them and can therefore only be basing your opinion on exam stats, which we all know is only one aspect of an education.

You are absolutely right the independent school fees are their families' business. So why not just shut up and pay them?

I am not very good at Maths, but I think it is quite simple.

600000 odd private school families x 7000 on average per child (for simplicity’s sake)= 4.2 billion subsidy towards State Education and now they want to, if we trust the IFS figures, ask for an additional 1.5 billion subsidy from these families towards state education.

So they want these 600k families to cough up 5.7 billion pounds in subsidy towards state education. Per Year. I am not going to multiply it by 14 because I understand that not all families do private school all the way through.

And the argument goes that because they voluntarily were happy to subsidise the 4.2 billion they should now happily subsidies another 1.5 billion (plus of course the additional tranche the private schools also charge them for the extra curricular and nicer environments).

So instead of letting sleeping dogs lie and recognising that the 4.2 billion subsidy was already quite good we are now going to shoot ourselves in the foot with this big fight and end up with lesser overall subsidy towards state education. It is all rather reminiscent of Brexit. We had a good deal already.
Pardon me, but it does not make sense to a state school parent like myself. It does not even stack up to GCSE maths level.
But thankfully back in my days we did have proper Maths teachers. So I can’t really blame it on that.

If anyone does care about the vat issue, read more about it and sign here :

https://www.change.org/p/stop-labour-from-adding-20-vat-to-private-school-fees-and-forcing-kids-to-change-schools/u/32672954?cs_tk=An7Iy1Sp4okMBb7UcWYAAXicyyvNyQEABF8BvE7huEk9vVrX8Yg0wNRkMX8%3D&utm_campaign=d2ae502bce934219954a5d593e74cfe7&utm_content=initial_v0_7_1&utm_medium=email&utm_source=petition_update&utm_term=cs

It is so like Brexit, disappointingly so. All catchy soundbites and the actual detail behind being as scary AF.

Well the FTSE 250 didn’t like Labour’s manifesto either today so it appears the City of London isn’t buying into the pro business stance either. It just won’t work having a rate cut on the horizon coupled with a Government that will have to raise taxes if they want to meet their pledges. Let’s face it the non doms/dons will be long gones. All rather gloomy for team GB after all.

No, they would be partially state funded schools operating in a free market. More choice to parents, more opportunity for everyone to demand the education that they want. And free-at-delivery at the voucher point for those that want it.

As a taxpayer and voter I have as much right to say how much state school funding should be as anyone. And by not using it, I support it more than most. And I have expressed no opinion about it anyway so keep your reactive little wig on.

You are in a real muddle with what is and isn't my or your business. I do pay the fees. I am not asking for anything other than being left alone. You are complaining about my fees, which are none of your business, so don't.

Well said. And actually the number of families is lower because that's 600,000 children in private education, and most of those will have siblings. So at the average of 1.7 children per family, you're looking at about 360,000 families coughing that sum up.

Then, very obviously, the state schools would become partially fee paying schools. In any case it's all just gnomish musings - it's not going to happen.

Yes, you have a right to an opinion regarding how much state funding school should be but, given that you haven't set foot in one for the education of your offspring, that opinion doesn't have any real life foundation upon which to base it. As I said previously, poring over exam result stats is only part of the picture.

I am not in a muddle at all. I'm perfectly clear what I think about all this. You seem to have forgotten that it was you who said "So the £7.6 to £16.7k funding gap you're bummed about, which I think is none of your business... blah blah blah". Weird.

I am not complaining about your fees at all. That is quite different from making an observation about the very substantial difference in funding per pupil between sectors, when you appeared to be begrudging of state sector tax rebates. Let's be crystal clear. I do not care what you chose to pay in school fees and I care less about what you have to pay in future. If what you signed up for was a bit too aspirational for you, then it is up to you to make adjustments. That is absolutely none of my business and all of your problem. Conversely, if you actually can afford the fees with VAT, then just pay up. It's all quite simple really.

@ForlornLindtBear here's an analogy. Let's say Labour decided that their main priority was to improve social housing and build more affordable housing. To pay for this, they announce tomorrow that everyone owning a house worth over 400k will pay a 10k a year levy.

How would the conversation go?
'But we're not actually rich - we spend very little on other things to afford this house'. You're still richer than most people, stop complaining.

'We can barely afford the mortgage already'. Then you shouldn't have taken it out in the first place.

'I'll have to move, and there's no decent housing nearby' Then you'll have to buy a tiny flat in a rough area. No sympathy - it's your turn to see how the other half lives.

'My family is so happy in our house and it's really close to my work and their granny' Tough. Suck it up.

'My child with ADHD is going to massively struggle in a small flat where they have to share a bedroom and have no outside space.' Tough. Now you know how the other half live.

I don't see this policy being nearly as well received. But maybe posters on here would support it?

Slightly off topic, but court has held Jewish private schools with fees of the order of only about £4k a year in Stamford Hill cannot get free school meals like state schools can in London. https://www.bailii.org/ew/cases/EWHC/Admin/2024/1305.html

" the state schools would become partially fee paying schools." Or, as happens in every country in the world where this has been implemented, some of them would flourish at the level of the state grant.

"If what you signed up for was a bit too aspirational for you, then it is up to you to make adjustments. That is absolutely none of my business and all of your problem."

If you're demanding that I pay VAT on it, then you're making it your business. If you're complaining about the gap from state to private, rather than more reasonably sticking to "let's all fund state schools better", then you're making it your business. And it's not your business.

I pay £££ of tax towards the state, including for the public services I don't use; I do much more for the state than a parallel version of me using state schools, and I want to be left alone to what is my business.