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?

Or just send your dc out of the UK to university. If you can.

That is certainly something to consider.

I don't understand the difference between profit making or not - isn't the cost going to be to the parents? Lots of businesses don't make a profit.

Should there be VAT on university fees? No. Tutors? Yes I think so if it also gets applied to schools. After school care, no. Cakes. Cakes? Err, I dunno, but it's a different category so not relevant here.

"Given the current state of state schools is a decent education really 'a luxury'?"
Yes, of course. If schools are such a state as you say (I don't doubt some are) then it is a luxury to opt out of that system. SEN too, some children have to make do with whatever the state offers in their area which is often not suitable and to their detriment, it is a luxury to be be able to choose a school (to be clear, I don't begrudge them this and would do the same). SEN provision in woeful and I very much hope it can be improved. I don't know enough about council funded places and how to crunch those numbers to make a comment on that specifically.

I take the point about the £ saved by children not taking a state school place. Which is why I hope it forms only part of a wider reform, mindfully done... 🤞

To answer your first point: if a school is a charity, or run by a charitable trust, any surplus (what you might call profit) has to be used to further the charitable purposes. There are no shareholders for whose benefit the school must be run, as there would be if it were a company limited by shares.

How are you going to apply VAT to tutors? @SuboptimalWife

I have DD tutored by specialists who are not even in the UK - paid direct to them via bank transfer, so not via an agency or a 'school'.

It would be a shame if I had to move other subjects overseas as well - reduces income for people in the UK, but if they are more expensive due to VAT...

Well, it's not my policy so I haven't worked out the fine print I'll leave that to others 😄

I see the point on the difficulties. That part of my comment was in response to being asked a question which I took to be more about the principle than the practical.

I think the number of people in the UK making extensive use of overseas tutors must be, and would remain, pretty low really?

Hmmm if only there was a way to boost state Ed funding without creating a crisis for some kids, like, ooooh, progressive income taxation.

the people convinced that investing in your children is a luxury when the EU don’t accept this, that a shame.

huge missed opportunity to engage with the private sector and widen access and community engagement…

Labour don't want to widen access. They narrowed it when they destroyed the assisted places scheme. My dh was educated on an assisted place. His mum was a cleaner and he went to a school that they could never in a million years have afforded.

still, at least we can all take comfort that Brexit is really working for Britain with this VAT policy being enabled! 😂

No it’s obvious that they’re happy to level down, sod music, drama, SEN, art, sports - let’s just all focus on maths.

Yep. And when Labour started closing grammars. Damn those clever kids!

Surely no one in their right mind takes comfort that Brexit is working for Britain 😩😆

I think the number of people in the UK making extensive use of overseas tutors must be, and would remain, pretty low really?

I imagine it might be now, but I was surprised when I was last looking for someone just how many overseas options there were via one of the online platforms. You find people there and then set everything up outside that.

DD now has a masters educated British tutor for one subject who happens to live overseas and charges around 50% of what we were quoted in the UK per hour. For another the tutor is in the US and the price is about the same but the US guy is better qualified, and the time difference works well for after school.

If kids are comfortable learning via zoom then it seems an obvious choice...

The curriculum changed overnight too- there was an immediate announcement that some already in place vocational qualifications would not count in GCSE statistics, and then later that IGCSEs would no longer count in performance tables as GCSE Maths and English- yet Independent schools still use them today.
This government has disadvantaged state schools and state school children- particularly those in the most deprived areas and those with SEN - in every way since they came to power.

@SuboptimalWife

I think schools are in a worse state than you think they are. Teacher retention is terrible, they are leaving the industry. There's not enough money. There's no time or resources for SEN evaluation or support. Many schools have underperforming results.

VAT is not charged when the product is considered to be an essential good or service. This covers education in the EU and most of the world. I consider a decent education to be nearer Kier Starmer's kids' state school's SAT results of 83% not my local's around 40%. If SEN support is woeful then struggling to pay fees to get them some semblance of a happy life and a decent outcome is not a luxury. That the government has failed people should not mean that they have to pay extra on top of their extra.

It is indeed not right that only privileged people are able to pay to get what they need, but as I've said a hundred times now there's a good chance this policy will not create money to do that so all it's doing is move everyone except the really-really-very-rich down. Perhaps if they stopped scapegoating however many private school parents are left and instead did some general taxation they could raise enough money to fund schools properly in an ongoing and non-damaging manner. If the state schools were great people wouldn't use private schools.

If you would put VAT on school fees why not university fees? Universities aren't essential, there are plenty of other things for 18 year olds to do.

Sorry the comment on cakes and councils paying VAT were flippant, but they point to the fact this policy has not been thought through.

Yes, the educational spend per pupil in the state sector is appalling, on a downward course since 2010.

This VAT policy is going to do very minimal amounts to address this huge problem and will create other problems.

I understand it fully thank you but you clearly don’t if you think all profit making businesses charge VAT like you originally said. They don’t have to charge VAT on products or services that are VAT exempt. It’s nothing to do with making a profit. In fact, a non-profit making business may still need to charge VAT if the products or services that they supply are VATable.

@TitusMoan - This is laughable. Anyone who can shell out £75k for school fees year after year does not deserve sympathy. They can add a bit more to the mortgage or something to meet the VAT. The vast majority of people earnnothinglike this. As a teacher working in the state sector, I was on £35k and paying a large part of that on a mortgage on a small house. Having £75k to throw at school fees annually is most people’s definition of wealthy.

This is silly. Obviously anyone who can afford that is of course extremely wealthy - but my point is that people tend to operate within the realms of what is affordable to them. If someone chooses to send their kids to private school (which could be for a whole host of reasons) then that is their choice...BUT those parents might currently be at the very limit of what they can afford. So if they can no longer afford it after the VAT addition, they have to negatively disrupt their child's educational provision when they are already saving the state £££. That doesn't seem right to me - and what I really resent is this attitude of 'well you can afford private school so therefore you must be very rich and therefore you can afford a 20 percent increase on the fees you already'.

You being able to afford to pay a mortgage on a small house might be some people's idea of 'wealthy' - but you'd be pretty upset if a tax meant you couldn't afford your mortgage repayments anymore, wouldn't you? It's relative!

Can't they 'get a better job?' That line is trotted out on here enough to people struggling.

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

Yes entirely. I already said it counted for further education. There is SEND support at uni but it is not the EHCP which ceases. You can use it as evidence to support applications for support but it no longer holds any legal status.

In addition - it can apply up to 25 if outcomes have not been met and there is a need for education or training.

I don't need a link thanks.

@PersonPerssonson
Yes, if state schools were great then far fewer people would use private schools (although I think plenty still would, concentrated at the wealthiest end of the spectrum), and the VAT raised would nowhere near enough to achieve that, it's going to take general taxation and a determined effort to improve things. I do know how bad it has become in some schools. I suppose "luxury" means different things to some people. Yes, education in itself is essential, but I think private schools provide a luxury service with many benefits beyond the average, even above average, and certainly the most terrible state schools.

And of course it is also a luxury of choice to be able to buy a house in the "right" catchments too. I don't like it, but we did it, and I bet Keir Starmer wouldn't have sent his children to the school in your example... The dream has got to be that there are no "terrible" schools and they are all decently funded. As I said, a girl can dream!

"If you would put VAT on school fees why not university fees? Universities aren't essential, there are plenty of other things for 18 year olds to do."

Of course universities are essential. Well, if you like to have qualified doctors teachers and scientists and a generally well educated population they are. Admittedly some courses are less essential than others...!

Thanks for the interesting discussion 😊

No I don’t get it, more kids should be able to benefit from any parental investment, rather than making it harder for any parent to invest. We go out of our way to encourage businesses to invest in their people, but we don’t encourage families to invest in their kids, and some people say all parental investment is unfair.

I can see the logic but it’s a race to the bottom.

Whereas progressive tax and spend wouldn’t be…because it wouldn’t specifically target education spending and open that door.

I don't know anything about private education, but I do know about VAT. If things like music lessons are provided by a freelance or peripatetic teacher and the parents pay that teacher direct for their services, then there won't be any VAT to pay unless the freelancer's small business meets the threshold for VAT registration. That threshold is currently £90,000 pa. The majority of individual self-employed teachers would be below the threshold for registration, therefore no VAT would be charged.

Perhaps if they had been privately educated Labours maths would be capable of working out that this is a potentially costly policy.