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.

But if you drop to part time does the work you do now just disappear or will someone else pick it up? If someone else is doing your old job then they pay tax and ni on their salary so the tax and ni coming from that role is still the same just a diff person paying it

Normally, more children are sent to private school at sixth form. Roughly 7% go to private secondary schools Year 7 to Year 11 and 15% go to private school for sixth form. Many people who currently send their children to state school won't now make the move to private for sixth form due to the increase in fees.

This is also where there is a bubble in pupil numbers, which will create more pressure on state schools.

It varies a lot - DC1's state primary and one comp were 90% white English MC, mostly non-religious, privileged lefty parents. Another comp was slightly more diverse ethnically and economically, maybe 70% MC and 30% non-White, not sure about the religion. DC2's private may be 30% white, lots of religious families which is important for us as we are also religious. Friends' private schools in SW are predominantly European mix which I really like as it shows you so many perspectives on things in life.

So diversity does depend on the area more than on type of school.

Nope, didn't need to read that.

They’ve reduced the reception classes from three to two at my DC’s private. I don’t know the figures for the senior division but a lot more than usual have left year 6 for state this year instead of continuing into year 7.

Actually the opposite is true.

Many moving to state system for sixth form, not because of fees, but because university applications will be looked upon more favourably.

A number of my friends furious that £100ks school fees have not bought them the privilege and advantage they thought it would.

Yes vat will be charged on independent specialist schools but as the fees are paid by the local authority rather than they are able to reclaim the vat paid so overall net cost is nil

You're really struggling with numbers so let me try to help - assume you have 25k pa now to pay for PS for one child. VAT makes it 30k which you can't find anymore, especially if you have more than child.

So you move your child to state. If you don't review your work situation than you invest some part of 25k pa you now have free in you child's extra curriculum/tutoring and the rest you invest - kids ISAs/trusts/pensions/house etc. These investments are likely to grow overtime as well.

Clear now?

sorry, you're very wrong here - statistically 20% of six form is private.

Key independent school statistics | Guide to Independent Schools

100% this. I’m not affected either (though we were considering moving our eldest into a private school, we’re now not) but the argues are neither pragmatic or factually correct.

• it is absolutely legitimate and widely adopted to exempt education from VAT. Removing this exemption is a dangerous precedent re university fees.
• It will not impact inequality, other than to make private schools even more elite. You would need to tackle catchments and grammar schools. Neither of which there is any appetite for.
• We should ALL be contributing to our children’s education. Across the board and certainly in the average income brackets. Perhaps then people would value it more.

It’s a wealth tax. 100%. But we the other measures coming down the funnel perhaps some of these cries of ‘I don’t mind paying more tax’ will be tested in reality. As we all know, it’s dead east to spend someone else’s money.

What a ridiculous and patronising post. Of course she’s not going to flog herself to death for the joy of “contributing to society” when she doesn’t need the money. Nobody would, including you, no matter what fibs you put on the internet pretending to be saintly. In fact, why would anybody want to earn money at all. We should all do it for free for the good of society 🙄

My local private school has hardly any white British kids in it. It’s certainly not upper class or upper middle class Brits. It’s pretty much all successful European and Asian/some West African first and second generation economic migrants and a few big working class British business owners. I hear they are extremely pissed off about this VAT policy (friends teach there). Remains to be seen how they react, pay up, leave etc.

So if I were to judge based on my local private school only, I would be saying it’s some of the white middle class Brits screaming loudest for this policy as they have been priced out of private education. And they don’t like other people’s kids especially not ethnic minority or working class kids overtaking their kids or their values. I suspect the situation is very different in different locations.

Sorry, this is inaccurate.

Many PS run the IB which is generally considered a better path to uni.

Again, from experience.

Actually, quite a few mega high earners i know currently would actually like to pay more into the pot as they want to see public services improve and can afford to pay more
@Ubertomusic

Your mega high earners can pay more tax if they so wish. This is from the Guardian:
Susan Reynolds (Letters, 28 September) says: “I want to pay more tax for the public services I enjoy.” She might be relieved to know that she may do so simply by sending a cheque to HMRC. I understand that you can even specify where you would like to see that money spent.

If you make your rich friends aware of this, I wonder if they will voluntarily pay more tax?

Actually, quite a few mega high earners i know currently would actually like to pay more into the pot as they want to see public services improve

They certainly would if their kids were now in state schools.

A number of my friends furious that £100ks school fees have not bought them the privilege and advantage they thought it would.

@pintofsnakebite surely you warned your friends of this scenario? Also, given your views on private schools, I’m surprised you have so many friends who educate their dc at them. Don’t they get a bit fed up with you constantly lecturing them on their poor moral standards and how they’ve wasted their money?

Ouch.

You tagged the wrong poster.

I don’t think the policy is driven by a sincere desire to raise funds. That is just a fig leaf. Though of course, extra funds would be nice.

Rather, it is to whittle away at private schools for ideological reasons. This both illiberal and counterproductive.

Families with capital will find ways to pass as much as they can to their own children. Rather than investing in “human capital” they will extend house deposits, businesses, farms, etc. And nothing will stop like minded people with similar concerns from associating with one another and offering mutual aid.

The heavy handed authoritarianism required to make a dent in this natural human behaviour creates hell. (E.g. Stalin, Mao, etc.)

A penny on income tax and tackling public sector reform would be much more effective and respectable! We really would all be in it together rather than singling out unpopular minorities for performative punishment. Very self defeating.

You can gift as much as you like it’s not limited to £3k, it’s just that if you gift more and die within 7 years it is brought into your estate

Actually we don't discuss it much but actually yes, i have a wide range of friends in a variety of circumstances.

We are capable of discussing things intelligently without resorting to personal insults.

I don't think they lack morals, they have made different choices to me that's all.

We are still want to be friends with me even though I think they should pay the VAT.

Actually most don't see a problem with it.

There is no limit on what you can gift, even within 7 years, without tax. It simply had to come out of your income rather than your assets.

Put simply, at this point in time, you are allowed to spend your income as you wish. You are not forced to save it for the government to tax upon your death.

I really wish there would be a credible, transparent to track the financial success of this policy.

Is it even possible to measure the loss of tax revenues due to ex-private school parents reducing working hours / stopping work specifically as a result of this policy? (genuine question)

Unfortunately I think the only thing we can realistically measure would be the number of students in private schools before its announcement (not enforcement) and at least 4-5 years after - in order to factor in all the families “biting the bullet” through the next natural transition points.

At this point I consider the VAT a done deal - no point to debate it anymore. I just want to know if we can have some accountability from this policy at all.

@nearlylovemyusername

No, I’m not struggling with numbers

You said:

At present it takes 300-350k on average to put a child through 14 years of PS.

And then you said:

In some years time you have two state kids, one still benefited from all support from parents who couldn't afford PS gave them AND 300k saved for their uni/house deposit

So if they have £300k saved for uni / house deposit, given that you’ve said it costs £300k for PS then they COULD have afforded PS, just chose not to.

That was all in the same post.

It’s not my comprehension skills that are faulty here.

@EverythingAllatOnceAllTheTime "Many PS run the IB which is generally considered a better path to uni"

Generally considered by whom? And if that is so, how is a criterion which specifically favours kids from private schools remotely fair?