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.

“Never argue with stupid people, they will drag you down to their level and then beat you with experience.”

I have no skin in the game - kids state educated, we are fortunate to have reasonable schools near us. I count myself as a-political, but I so agree with this post.

This policy is idealology based.

It is not child centric, which is an abject failure for any educational policy.

If it were phased in, if SEN provision were increased & improved in real time to match, if education of practical skills were as invested in and valued as much as academic - then I could get behind it - but this... It is a bitter, poorly thought out policy, based on the politics of envy to no real practical purpose.

It will be interesting to see if it has all the intended consequences in the long term, but unless there is a great deal more vision, in my opinion, it feels like it will just move the deck chairs about.

Make this make sense.

Ditto pigeons and chess eh?

That's where DC got a scholarship to cover the extra 20%. We would not be able to continue otherwise and we had to act very quickly.

But you are also giving up work, apparently. So you also have to account for the lost earnings somehow?

Oh, I'm sure Ubertomusic didn't factor this in.

But they will gain the taxes from the person recruited to replace you.
And I don't believe that all these parents are going to be giving up on investing in their children's futures. They will use the money they previously spent on school on top-up tutoring, building uni funds, educational trips, activities and extra-curriculars. They will need the second incomes to make sure their kids keep their advantages.

Because in the main the independent schools they operate for a profit are the specialist independent schools. Most of the public schools in the uk are already operated as charities. If you stop allowing schools that generate a profit there are no alternative schools for many children with Sen, they can’t simply just move into state mainstream like children from a non specialist private school can. That said I don’t actually agree with the schools that as operated as businesses and generate a profit as they are basically fleecing the taxpayer but there needs to be more state Sen provision first so we don’t have even more kids than their already are with no school placement

The PP statement was not about my income, but thank you very much for your concern. A few PPs said the jobs would be picked up by other ppl - in reality it's not always the case. My work requires at least 8 years of training and a PhD, and it's not a six figure job either so very few people are keen to pursue this path. So no, there is no queue of people eager to fill in the "vacancy".

You said that you were moving 150 miles to put your DS in a new school because of the increase in school fees due to VAT. You said that he had been awarded a scholarship of 20% which would cover this increase.

You also said that you were quitting work as a result of the move.

So can you afford to lose your income, in which case you could afford a 20% increase in fees and not move 150 miles?

Or are you not actually being forced to move and quit work because of Labour's VAT policy?

Ubertomusic - apologies.

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
**
@Thatmissingsock

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?

Why on earth would they voluntarily pay more?

Labour’s tax policy is clearly dynamic - veering towards extracting all they can. Given that, many higher earners currently have no certainty as to what level of taxation they are going to be on the hook for.

Few of us are sadomasochists.

Why on earth would they voluntarily pay more?

I agree but I’ve read on here a few times posters saying they’d like to pay more tax to improve services. However, when it’s pointed out to them that they can they tend to go quiet.

VAT is not an insignificant contributer to UK tax revenue. The revenue it generates is just one percent less than NI contributions: https://ifs.org.uk/taxlab/taxlab-key-questions/where-does-government-get-its-money

If we were to abolish VAT we'd have to make up the shortfall The options would be problematic - doubling NI rates for example isnt going to be popular.

Given that VAT and other indirect taxes are here to stay, it is important to understand how they effect different income groups and understand whst goods and services have them applied. As the ONS quote below illustrates, lower income households pay a far greater proportion of their income on indirect taxes including VAT. The poorest 20% of households are devoting over a quarter of their income to these indirect taxes. This is because VAT is charged on a large proportion of essentials. It simply can't be avoided even if your income is low. Advocates of the continued exemption are arguing that the poorest households should continue to pay VAT on essential goods snd services, but private education (that is mainly purchased by higher income households) should be exempt. I dont think this fair. It is for that reason not envy, animosity etc. that i support the policy.

Indirect tax is largely determined by household expenditure, and increased by 9.1% between FYE 2021 and 2022, in comparison with an increase of 4.8% in direct taxes. Main contributors to increased indirect taxes were Value Added Tax (VAT) and duties on hydrocarbon oils, consistent with annual increases in household expenditure as coronavirus (COVID-19) pandemic restrictions eased. For more information, see our Family spending in the UK bulletin.
The richest fifth of people paid 1.9 times more in indirect taxes (£9,000) than the poorest fifth (£4,800) in FYE 2022. However, richer households pay a smaller proportion of their disposable income on indirect taxes (9.0%) than the poorest fifth (28.3%).

https://ifs.org.uk/taxlab/taxlab-key-questions/where-does-government-get-its-money

No, sticking two fingers up at the government is far more important than all of that!

That's how you read it, and even though it's factually incorrect I think I'll leave you to it. I don't have to report to strangers on the internet.

Quite.
I’m bored witless by the left wing vitriol directed to parents who send their children to private school.

It's literally what you wrote.

I'm not here to tutor 11+ comprehension, sorry.

Or indeed to explain why you are moving 150 miles and giving up your job in order to get your son a 20% private school scholarship because private school fees are going up.

Exactly. So I don't understand why you are demanding my explanation.

I thought I'd give you a chance to clarify.

Should have just dismissed it as rubbish straight away.

Whatever makes you happy.

The published statistics show that only 7% of Year 7 to year 11 students attend private schools and 15% of sixth form students at a conservative estimate. Although, I think someone sent a link showing 20%. So, even if just state school students stay in the state sector, then that will lead to a minimum 8% increase in pupils in the state sector due to the VAT increase and each student costs the taxpayer £7,000.
As someone has already said, the government should be held accountable for the policy. Therefore, we need to see the effect on percentages of children in private school to see whether there is a net gain or loss from the policy.