VAT on school fees (you have to read this!)

[EverythingAllatOnceAllTheTime]

Government’s private schools VAT raid ‘could cost taxpayer £1.8bn’

Parents who are forced out of sector are likely to work less or even quit jobs, according to think tank research.

Adam Smith Institute.

Ok. What else ? 🤷‍♀️

Yeah but it will be worth it just to annoy the whiny people who keep making threads about this topic.

god these posts are so boring

Just one of the many unintended but entirely predictable consequences of this policy. Imagine people working less because they don’t have the same incentive to work 🤷‍♀️

And women will be disproportionately affected. Women like me who are giving up work. So they lose my income tax + the proposed VAT.

And who is the Minister for Women? Bridget Phillipson of course!

Means testing winter fuel will also cost more than it makes. Labour won’t care until the money actually runs out

The Government has based the policy on an assumption that between three and seven per cent of private school pupils will move to the state sector as a result of it.

But the Adam Smith Institute has claimed that this is based on flawed assumptions, and suggested the policy could have a net cost to the taxpayer if more than 15 per cent of children leave private schools.

Then feel free to bore off darling.

This is a rarely discussed topic on Mumsnet. Thank you for raising the issue OP.

Thank you @EverythingAllatOnceAllTheTime - great to see another thread on this - got bored with attacking Jess Philips I guess.

Anecdotally it is over 10% at DDs school. We have 1000s such examples but the problem is the data won't be available until next year.
Labour were incredibly calculating in the timing of their announcement eg over summer for a number of reasons;

• many LAs and scholls had OOO on so applications for transfers haven't happened yet
• they are banking on parents waiting until end of 24/25 academic year to withdraw their kids and they will then claim this shows that a lower % than expected have been impacted by VAT

I can well believe this is true. My income pretty much all goes on the fees and DH’s pays for everything else. If this was 7 years ago, I probably wouldn't have gone back to work or not worked as hard. Last year of A levels here, so at least not long for us.

That’s not what the research from the IFS says 🤷🏻‍♀️ - ifs.org.uk/sites/default/files/2023-07/IFS-Report-R263-Tax-private-school-fees-and-state-school-spending.pdf

Anecdotally it's currently 0% in DD's year group (year 9, London day school)

But I am sure it will vary by region and school. Only time will tell if this causes a substantial fall in student share of private sector.

I wouldn't give huge importance to that ASI paper though even if they are on 'my side' this time. They have a clear political agenda (to be fair they don't hide it) and not known for cutting edge economic research on British education system.

For what it is worth, I think the treasury will have a net gain out of this - maybe not a billion pound, but close.

Does that include the burden on the tax payer to fund the additional school places in the state system for families switching?

This always was a disastrous policy that made no economic sense. It will be millstone round Labour's neck to defend at the next election.

Ah you mean the IFS report that was based on assumptions and clearly stated thar further research was required, research that Labour haven't carried out? The report that seriously underestimated SEN and whose authors admitted was overly optimistic? The report whose maths has been challenged by subsequent reports?

Kids at private school will only start to leave next year but those making the decisions about whether or not to join a private school will change their mind I think

I can attest that in London at least it is definitely not as easy as that article suggests!! DC2 into a great state school now but it’s been a very tricky process with things as basic as proving he lives with us as no medical needs, benefit eligibility etc meant no formal record of our recently new address. 🙄

Isn't this policy wildly popular with the public?

Can you show evidence to support your claim that it is wildly popular? Most voters didn't have it on their radar

@EverythingAllatOnceAllTheTime you’re the one who said you have to read this. So I did, thought it might have something different to say, but no, same boring shit as before

Applying VAT to Independent School Fees Could Cost As Much As £1.6 Billion — Adam Smith Institute

Yes, this was known in March.

Doesn't matter - Labour aren't doing this for any economic benefit, it's purely to destroy successful sector

(My own case def proves AS article - DC move to grammar, not only I won't be paying VAT, but given I don't need to pay PS fees I'm retiring many years earlier than planned, so HMRC will lose a lot of my income tax and NI and will pay for many years of my DC education).

The Adam Smith Institute is a balanced, impartial and credible source too.

The only poll on this I know of is from YouGov, conducted in January

According to that, 62% support it and 21% oppose it.
https://d3nkl3psvxxpe9.cloudfront.net/documents/Results_PrivateSchoolVAT_Jan24_clean.pdf