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 currently don’t have to register for VAT until your turnover gets over 85K, I believe. So unless they dropped this threshold I don’t think many private tutors would be affected, though some businesses who employ them might. But in principle I think you are right.

I had to remove my child with SEN from his state school, because he was cruelly bullied and the school came nowhere close to meeting his needs. We couldn't afford private education; we had to home-ed him. So I am sympathetic to the needs of SEN kids, but all this rhetoric of 'spite' and 'envy' is really not on. It is not spiteful to think that the better-off may be called on to pay more to invest in state schools. Clearly the government won't raise enough to address all the issues of woeful under-funding and lack of recruitment, but it might be a start. Even if the policy fails, it doesn't mean that those who support it are doing so because of envy and spite. That's a really rude way of trying to shut down legitimate discussion.

out of interest why do you think VAT should not be charged on a business, as it would be for any other profit-making business?
Our school isn't making a profit. Our fee increases in the last few years have been driven by wage inflation and rising energy costs primarily (not just charging what the market allows for profit like another PP suggested). The proposal is to charge VAT on education, not the business. Personally (and respecting that others will have different personal views) I don't think education should be taxed. And I think that Starmer has some balls to suggest it when he himself benefitted from an independent education with a bursary (many independent schools I know are planning to stop any kind of financial assistance as part of their plans for VAT)

All the maths is based on a max of 7% kids moving.
The Independent Schools' Council parent research suggests that 20 - 25% is more likely.

It's also worth noting that the economic crash of 2008 impacted the numbers of children at independent school but there was a 5 year delay in fully seeing that as parents tried to keep going to allow children to finish their key stage or whatever. However, in this instance, coming after CoL crisis and wages not keeping up with inflation, many parents just don't have the same buffers available.

They’ll wham this through as fast as they can - they’re solidly assured of popularity, thanks to education being deemed a luxury good, and not an investment.

Meanwhile, the people who knew when they had dc that they could afford the big public schools will be fine. It’ll be very painful for the bottom 10-20 percent in private who are likely to have also been hit with all the PAYE rises since 2010.

my dc have diagnoses a plenty but no EHCP…I really hope there is something for SEN parents, but over and above that, we shouldn’t be taxing ANY parental investment in their children.

It may very well not make any money at all if enough (10% rather than 7%) kids leave. More than that and the state sector is increasingly worse off than it is now.
That's a huge gamble that has not been made clear.

And even if it works out initially it will dwindle as fewer kids start private school, in a few years the policy will result in an overall drain on school finances if it hasn't been already.

SOME people are operating with envy and spite. The ones that just hear the headline and say 'you're rich I don't feel sorry for you suck it up'. They're in this thread. Those people are voters and will be captured saying similar in soundbites over the next couple of months.

Those who put that aside and have a read and think about it may come to the conclusion that it's a very risky gamble. Alternatively if it's going to be a guaranteed winner for everyone then I'd love to hear how as part of a constructive discussion using numbers and answering previous points.

@Peonies12 no one has mandate for abolishing private schools. You are deluded and may be move to Cuba if you are serious.

@tothefareast80 Well done! I hope most people can make this before the haters get into power. Sadly most may not be able to but giving more in taxes is ludicrous.

£1.6bn is nothing in the grand scheme of taxes. If 'tax the rich' is the goal then do it in some other way that doesn't disrupt children, doesn't increase the burden on state schools with a huge (probably) lag until more funding arrives, doesn't screw over SEN kids, is simple and cheap to implement, and isn't a massive gamble with the risk of putting more children in state schools without more money coming in to pay for them.

It's just a robin hood thing for Kier to shout about that most people aren't going to oppose, but the numbers don't add up and as a voter hoping for a bit of sense in government it's concerning that he doesn't care.

@Lookingforwardback · Today 07:27
I agree @BiggerBoat1 , I say that as a past parent of one of theses schools. They are dreadful institutions with far too many unqualified teachers who are not fit for purpose

Employing unqualified teachers is a criticism often levelled at private schools on mn. However I’ve also read posts complaining that due to a shortage of teachers, state schools make for example, the sports teacher teach Spanish or the geography teacher teach maths for which they are unqualified.
What’s the difference?

Will be interesting to see...

Will it hit ballet, football coaching, swimming? Or just 11+ tutoring?

How about music lessons - only ones outside school, or inside school too?

How about online schools like King's Interhigh?

What about tutors who are not in the UK? DD does online classes overseas for some subjects. How do they intend to claim the VAT back on those?

They’ll wham this through as fast as they can - they’re solidly assured of popularity, thanks to education being deemed a luxury good, and not an investment.

IMO this is the problem. UK education is not viewed as a necessity or an investment and instead is bizarrely viewed as a luxury by some. In the EU you can't charge VAT on education so ironically Brexit has helped the Labour Party with this plan.

To me it seems like a race to the bottom policy. By some children being taken out of state education then there is less stress on the system in the same way people who use private healthcare take stress off the NHS.

Someone up thread mentioned raising the bottom level children up which is a good idea but not by moving other children down because that makes no sense and certainly ftom dome quarters seems to be borne of spite.

Nevermind VAT on private tuition, it's VAT on university fees I'm more worried about because if Labour can add VAT onto schools then its not inconceivable they could add VAT on uni fees.

I can't see how we are not going to be hit by both VAT on university fees, and a rise in basic fees.

I read yesterday that fees should now be 12.5k a year rather than the current 9k.

Wonder how Keir and co are managing to do this and spout drivel about want to be more closely aligned with the EU at the same time...

I agree it's very worrying. The thought of VAT being charged on uni fees makes by blood run cold.
If that happens along with VAT on school fees then IMO we will be moving backwards to a time when only the very wealthy could afford a good education and the rest of us just 'made do'.

I don't like the idea of children being forced to move schools because their parents can't afford the vat, none of this is their fault. I don't think there should be a vat exemption for private schools, but I do hope that it is managed carefully and practically - phased from reception, or even only applied to new intake in any year maybe. I think it's fair that VAT is charged for the luxury of private education, and hope it is part of a much wider focus to massively improve funding for education in general and to improve the experience for ALL children.... Well, that's the dream at least!

> Wonder how Keir and co are managing to do this and spout drivel about want to be more closely aligned with the EU at the same time...

Good point, they can't. They are shouting much louder about school fees than EU regs drift though so they'll probably hope nobody notices (everyone loves taxing the rich, who would question it?!) but if it comes up just shrug.

Will be a lot of wasted resource and money implementing VAT for it then to be taken away again should we rejoin. And all kids (not just medium-rich ones) disadvantaged in the meantime.

I'm thinking about applying for an EHCP for DD - if that gets you VAT exemption for private school fees that it should apply for university as well.

PITA for school and us, but worth the faff in the long run.

I'm thinking about applying for an EHCP for DD - if that gets you VAT exemption for private school fees that it should apply for university as well.

^^ EHCP isn't used for university, it is ceased once you leave education or further education .

Where to draw the line? Many are non-profit making. Should it only be the profit making ones? Should there be VAT on university fees? Tutors? After school care? Cakes? Given the current state of state schools is a decent education really 'a luxury'? What about SEN? What about councils that have to fork out for a private school because there is otherwise no provision?

The taxpayer is already saving £7-8k+ per child NOT in a state school, that's more than the VAT.

Taxing a dwindling service isn't going to fund schools properly, certainly not long term, and could well cost more than it earns from day 1.

Not entirely - it applies until age 25 and is used for further education, and looks like some help at university is more easily accessed.

It could certainly be used to argue VAT shouldn't apply.

https://www.specialneedsjungle.com/no-legal-sen-protection-at-university/

It would cost me 183k to put DS through private secondary in my neck of the woods (I am considering it quite carefully so I have done the maths).

I am blown away by the idea that people can say with a straight face that affording this is not out of reach for most people. For us that equates to just under one years household income and I would say its borderline affordable!

Edited to be clear - I am saying I disagree that this doesn't just affect rich people, I am not disagreeing with the policy.

🎻

I don’t think you understand VAT. Businesses are absolutely charged VAT, they just pass the cost on to the customer. It may have the same result but businesses absolutely have a responsibility to pay VAT to the Chancellor, and they, not the customer, would be prosecuted for failing to do so.

The taxpayer is already saving £7-8k+ per child NOT in a state school, that's more than the VAT.

I didn't know that @PersonPerssonson , thank you. It just goes to show what a bad idea charging VAT on private education is and how it could easily go tits up.

If the VAT-on-fees gamble goes the wrong way then there will be more kids in stretched state schools than extra money to pay for them, and over time that will get worse as kids don't join private schools in reception.

More kids and less money will make life significantly worse for all kids regardless of income.