Private School Fees plus VAT

[ApplesOrangesBananas]

I am looking at schools for DC to start next year. I have read some articles that said parents were getting ahead of this rise by pre paying for numerous years in advance. Obviously we can’t do this yet because DC hasn’t started yet.

I’m curious has anybody who has children at private school been told what to expect yet? Will fees go up 20% or will they “half it” with parents and only go up 10% etc?

This increase is something we need to factor into account when exploring schools.

Also this is not a thread for you to bash private schools and write things such as “choose state school instead like the rest of us”... if those are your opinions then please find a different thread instead. I purely want to know if any parents have received communication regarding a fee increase yet? Thank you

“I don’t trust the conservatives with the NHS and I don’t trust labour with education.”

I think I have to agree with that, given the track record of both parties over a number of years.

Our school hasn’t mentioned anything.

We received a letter several months ago that literally itemised everything (trips, meals, childcare, education) whereas previously we just got a bill for fees. Part of the school is also being ‘restructured’ almost taking away the ‘private’ aspect of it.

There’s no chance they’ll be able to get an extra 20% as fees rose by that amount last year with the result being a lot of kids were relocated to a school that gave better value for money.

I’ve got a year left (and just the one child) so I’ll pay whatever is implemented before then.

That will not happen. There is no state/private split to speak of at university level. There are only very few private niche universities.

Not how it works @Talbot53
Independent schools need those talented students and will continue to 'buy' talent as before.
It's a transaction. We give you a discount, you give us your eventual great results.

The exceptionally talented may well still be offered generous bursaries, but the culture of justifying your charitable status by offering heavily subsidised places to a significant number of lower income families will reduce.

If private education is being recategorised as a privileged product, then so be it. Let the class divide widen.

I would imagine that this will be fought vigorously in the courts. Whilst Labour can change the law through parliament as the conservatives did to declare Rwanda a safe country no matter what, the courts still have the power to test this law change and this is what will happen. It will fall foul of the ECHR which Labour already know. I have no doubt it will happen but there are plenty of very well funded people / organisation who will challenge it so I would not expect it any time soon. Anyone who thinks that the government can write a law that puts VAT on the same service but then excludes a random group of people some of whom aren’t covered by the equality act (e.g. service persons children or university student) and have no legal challenge are quite frankly living in la la land

@Talbot53

"So let’s add VAT to university fees then too."

Well that's a separate topic entirely. However Universities are losing money on the current UK students tuition fees of £9k a year and are cross subsidising this with ever increasing numbers of overseas students paying much higher fees.

So UK tuition fees do need to increase but doing so would be massively unpopular (see what happened to the LibDems on this). A politically easier solution would be include VAT on university tuition fees at the same time as VAT on private school fees.

This creates extra revenue for the Government which can be selectively funnelled back to universities without ever technically increasing tuition fees.

Sort of, but it's illusion to think that there aren't enough of very intelligent kids from wealthy families to fill the places.

Of course people can debate it if they want. You've posted on a public forum.

I assume the ultra competitive schools (we live in London so there quite a few) will pass the 20% straight on if they have many applicants per place. But the smaller private schools that struggle to fill all their places will want some to find some ways to be creative.

If you can’t afford it don’t go

LOVING the tax thing 💃🏻💃🏻💃🏻💃🏻💃🏻

Those parents no doubt could but that isn’t the full picture - there are many ordinary parents at private schools working extra shifts, doing extra work, cutting back on holidays etc to cover the fees - not everyone with kids in private school is loaded. It can be a question of what you prioritise spending money on and make sacrifices in other areas. And I appreciate, many don’t have this advantage/choice. We did it for years - DH is a chef for the NHS

2 million on community? Which school is this please? I want to move near it.

@Oakandashsplash - I cannot name the school or I might out myself. It is not that rare for the bigger schools, they are just not publishing it specifically (as marketing it openly will cost them more that could just be spent on the community).

But clearly this famous school is now publishing what they do more specifically and they have stated in the past they will spend up to 100 million over 5 years - whether they can do this with VAT or not, I do not know
https://www.etoncollege.com/news-and-diary/school-news/eton-college-publishes-school-partnerships-report-for-2022-23/
In reality raising aspiration like this does annoy some people who prefer a race to the bottom. So whatever these schools do, there will always be some haters out there.

Where I live most swimming pools, netball courts, tennis, squash, cricket nets, hockey, rugby, concert halls, drama etc etc all owned by private schools and clubs and summer schools run there. If these private schools do not survive and are taxed excessively, get ready for less extra curricular offerings for local DCs. Because we all know the council will not be building new tennis courts etc will they now?
This is exactly why the Lib Dem’s are encouraging the work together model rather than tax and control model that Labour seem so intent on.

There is also just no way that Keir Starmer won’t know that e.g Highgate School in North London also does quite a lot in terms of bursaries and outreach etc - because Starmer’s own wife went to Channing in Highgate and well, they live in London. These people absolutely know that some of these private schools really do make a difference at local level, as much as he will know the implications under human rights laws. So who knows what he is actually playing at? He has to at least start being very clear with private schools as to timeline and engage properly so they can plan ahead so local communities do not lose out! Personally I think the outreach and sporting facilities are more relevant than bursaries given the childhood obesity & mental health crisis.

There is no guarantee that splitting the supply will work as it may still be seen as one supply and vat able. Accounting web had an interesting article pre election in which they looked at this in light of a recent case by kfc where they had tried to split a supply into standards and zero rated elements

https://www.accountingweb.co.uk/tax/business-tax/kfc-ruling-spices-up-vat-on-private-school-fees-conundrum

Ask how much their CEO makes then

Most private schools aren't huge wealthy companies. Most don't have CEOs, unlike state academies ironically. DDs indy school has no CEO/COO/CFO etc. Just a Head, Deputy Head and governors. The local Academy state school has many more senior managers, on greater salary ranges.
Only the really wealthy public schools ie Eton run on big surpluses. Most do not and you can tell this from the number which have already closed this year.

Most private school, especially the more expensive “public schools” tend to not have anyone milking off fees and the fees tend to go back into the school through funding teachers, capital expenditure and facilities. The private schools that tend to have most fees distributed to shareholders and highly paid ceos are the independent specialists that are funded by the taxpayer and are fees far in excess of what most other private schools charge.

@Morph22010 - do you think some parents will be able to get their employer to pay school fees plus VAT and would the employer be able to set off the VAT?

A few years back I was offered a job in the Middle East and part of the package included schools fees for all my DC there.
People moving to London usually find it difficult to find state school places at secondary level for their DC so I wonder whether employers offer school fees included and whether they are going to pay the VAT (and if they can set it off). And if they do it for foreign hires, might they end up doing it for local too?

Our prep school has been running at a deficit for about 7 years and relies on a bank loan. Fees have increased by 23% in the last 2 years. Vat will be the final blow.

If a poster on a thread about, say, the two child benefits cap said they were 'LOVING' it, people would be up in arms. Why would anyone think it's acceptable to say you're 'LOVING' other people being taxed on school fees? If you don't agree, fair enough, but to gloat is spiteful.

I agree. It’s a disgusting comment. I don’t want to get called out for apparently being political, but you have to be certain type of person to take joy in children being unfairly punished through no fault of their own.

My dbruv had something like this. His contract included school fees for two, so he was covered regardless of future increases.

But he was in the U.K.working for a US company.

We don't have a CEO, we have a head and three deputy heads, covering preprep, prep and seniors.

Plus governors. It's a charitable trust.