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.

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)

And how much would it be offset by people increasing their working hours in order to afford the increase in fees?

@noblegiraffe "
And how much would it be offset by people increasing their working hours in order to afford the increase in fees"

And the people taking the jobs the private school parents are relinquishing.

That is correct.

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.

It's the victim mentality i don't understand.

Those who pay for private school, collectively, are amongst the richest in society.

You're not victims, or being discriminated against. Just being told to pay tax on a luxury. The majority of private school parents will pay up. A tiny, tiny number will send their kids to state school.

You say you're an unpopular minority - You're making yourselves unpopular, scrabbling around for spurious reasons why the rest of us should give a shit that you'll have to pay a bit more for your luxury, like threatening us with children with SEN having to attend state schools (its pretty offensive to suggest that we don't want children with SEN in state school, or that those children attending school with our children is somehow a bad thing - that's disablist, by the way, and it shows what you really think of disabled children) or that you're doing US a favour by giving your kids a huge leg up, or suggesting those who support this policy are racist because private schools are full of foreign students and we are jealous.

And other adjustments in behaviour, eg spending less or more on other things in life.

Not to mention the time lag for all of these things to happen.

Anyway I think we are all in agreement it will be difficult to get a statistically meaningful conclusion of this debate. No matter which side you stand.

I think the only real KPI is probably the percentage of private school students in 4-5 years time. Can’t think of anything else but happy to be corrected.

It's a shame Labour have chosen to take pot shots at private school parents in an unprecedented way. No other prosperous western nation has implemented such a policy. I would happily pay more tax to increase the quality of state schools but do that first and people will use them! This policy is a race to the bottom. Sure it's only 7% of kids or 20% if you look at sixth form but what percentage of net contributors use state schools? Causing disruption in the lives of your most productive citizens is foolhardy. The UK is in a precarious position where it needs to do everything it can to become more productive not sink itself with petty policies. I truly hoped Labour would prove more visionary.

Why not make it so private schools cannot generate a profit and must all be charities. That would broaden access to the best education the uk has to offer. This policy narrows access.

Causing disruption in the lives of your most productive citizens is foolhardy.

So .. Rich people should never be affected by anything because it might upset them?

I do puzzle at the rich=productive link some people seem to make...

It’s not about threatening that children with SEN will attend state school. You have got that all wrong. One of my closest friends has a child with SEN (and has SEN herself) and has had huge difficulties accessing appropriate services. Do you really think that more children entering the state system is going to help that when they are already at breaking point? Many of those children were moved to private in the first place when the state let them down.

It’s actually a number of pro VAT posters who are misrepresenting about diversity in state schools. I do wonder if they live in the London bubble. There are huge numbers of schools outside London which are 99% white working class. I went to such a school, my brother is a teacher at one, his daughters got to one. It’s actually worse where my brother teaches as they also hate “Southerners”, so it’s not just white working class, it’s a sub-section of white working class.

I’m all for increasing taxation for state schools. After all, I have a child at one. However, I want it to be done via general taxation so that the people with the most money pay for it and that doesn’t equate to all private school parents.

Only if it is gifted out of assets. If, it is gifted out of earnings, there is no limit and no tax.

@Catinavat go look at Finland's policies, then come back here.

I think - as an adopted Londoner of 25 years - this is spot on. I grew up just north of London and went to a diverse private school but as the bursary kid worked in the local shopping centre at weekends. My work friends were all white working class and this was reflected in their school friendship groups. Conversely my children growing up in London (z2) are currently in private school and there is very little difference in the demographic between their current school and the state primary they attended and DC2 is about to return to, as we have been priced out of the private system.

The one where they subsidise indy schools because they understand that they take some of the burden off the state? They banned for profit schools, not private ones. Schools have to reinvest profits or pass them on to parents

We now have to move 150 miles to a new school and I won't be able to continue my work there. My specialism is very niche so no one would be taking over my customers, I'm just closing my practice, that's it.

I’m sure it will cope. Nobody is irreplaceable.

Why 150 miles?

Campaign really hard on digital and social media platforms for more money/resources for state education?
Like you all are for the VAT decision to be changed?
Why do you think your online campaigning re VAT is any more likely to achieve results than loudly campaigning for improvements for state education??
Start petitions, write to your local MP (im sure many private school parents wrote to MP's about the VAT!!!), consider voting for candidates/parties for local and national government who say they will put more resources into our kids education?

Plus teacher recruitment/retention.

@Ubertomusic "We now have to move 150 miles to a new school"

Why?

Then you're really struggling with basic comprehension, I'm sorry

I tried to explain how avoiding paying 25k pa = per annum can save you 300k (even excluding investment growth) assuming you still spend part of these savings on tutoring /extras/ general lifestyle improvement.

To add to that analysis - those of you hoping that PS kids will lift up poor state schools, what will you say if these kids then get contextual offers? Will be nice to see

I am against the change - it is even against EU law. However Governments do not just have to do things for the money. eg I would rather be worse off and have lower tax rates with a smaller state; someone might want fewer people in the UK even if they were worse off. Not everything is about money.

Did you do all of this? if not, why?

Did you succeed? if not, why?

Of course, what no one seems to have mentioned ( unless I’ve missed it) is that Independent schools do NOT have to pass on the 20% VAT to parents, they can offset that against claiming VAT exemptions on all sorts of stuff- capital projects and the like. Eton, however, and the extremely wealthy foundation my DD works at, is charging parents the full 20%, so fees will go up to 68k or so. According to my DD her school hasn’t had any withdrawals for financial reasons. Indeed they have just paid £30k for a mural in the new theatre block.

No, I think you’re being disingenuous.

Many people mix and match PS with state. £300k would comfortably cover 7 years at secondary for instance - that’s almost £43k a year. Given that average secondary fees are currently around £19k per year that allows for an awful lot of fee inflation as well as VAT.

I think you also don’t understand how contextual offers work. It’s pretty much only Bristol that gives contextual offers based solely on school alone. If ex PS students qualify for a contextual offer then it will generally (other than for Bristol) be for other reasons in addition to school attended and it is appropriate for their circumstances.

You do sound awfully grumpy - wrong side of the bed this morning?