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.

I can't see why there is a consequence of people giving up jobs by removing students from private school. I get in some households there is no longer need for the finances, but you write is as you are being made to give up, my head is struggling to join those dots. If it is a childcare thing surely there is spare money for a nanny if switching to the state sector.

Local to me most of the private sector users that I know already have one parent not working anyway.

Most people won't know about it (because most people don't follow politics at all), but given than less than 10% of parents send their kids to private school, this would appear to fall into the category of "A tax on somebody else, who probably earns more than I do". People are generally pretty keen on those.

I say that as someone who thinks this tax is a good idea, but it's clearly not a decision that required a great deal of electoral courage from Labour. In fact it's about as close to an easy win on tax as they are going to get, unless they grasp the nettle and tax carried interest as income — which would be even more popular, except that I suspect they have promised too many big donors that they won't.

I fail to see how vat on school fees is causing you to give up work?

This policy was never made to make financial sense. Usual labour corruption

Lots of parents work only to pay private school fees, but now they won’t be able to pay so have decided to stop working

Because my salary goes to pay fees. I'm not getting a 3K pay rise this year so we simply can't afford it. Therefore I will give up work and transfer her to state school. Not sure how that was difficult to understand

If we have to move our child from their school due to VAT, I certainly will instantly drop to part time (currently a high earner) and any spending we do will be overseas as opposed to our UK based holidays right now. So no VAT, less income tax and reduced UK spend overall. In my child’s class alone there are 3 children already leaving due to the VAT.

I worked endless extra shifts to send our child private - all taxed

Lazy sods 🤣

I don't really care OP.

But why give up work? That makes no sense whatsoever,

Yes it does. If we move to state we don't need my wage so why should I work? We simply can't manage VAT.

You need to do some critical thinking. One of the things that private schools do really well is wrap-around care. High-quality child care and for us it's 7.30-7.15 or 8.30 for ages 11+. Along with flexi boarding.

Oh dear, poor mites.
You sound very bitter - putting holidays abroad before the continuity of your child’s education!

Personally, I would put my house on the number of people moving out of private school being minimal. But I may be proved wrong, of course.

Fancy putting kids in childcare / school for 12 hours a day!

@Shiremum40 "One of the things that private schools do really well is wrap-around care. High-quality child care and for us it's 7.30-7.15 or 8.30 for ages 11+. Along with flexi boarding."

You appear to think that only 7% of British families have two working parents....

How on earth would us mere worker ants ever know what the top 2% of earners in the UK felt about stumping up a couple of grand more for their kids to avoid the lumpen proletariat if it weren't for these threads?

They're doing us a huge favour, apparently. Or so they keep on telling us.

Lol @ taking anything emanating from the Adam Smith Institute as serious commentary on VAT on private school fees, or economics.

They are basically the libertarian/ neo-liberal loony fringe of the Tory party, the Liz Truss wing and beyond.

Really?

Money matters nothing to them?

Pull the other one.

You can read about the report (which dates back to March 2024) here: https://www.adamsmith.org/news/applying-vat-to-independent-school-fees-could-cost-as-much-as-16-billion. There is a link on that page to download the actual report, or you trust me not to post a fake then here it is: https://www.adamsmith.org/s/Short-Term-Thinking.pdf [PDF]

I have skimmed the report and as far as I can see the claim about giving up work is couched in waffle on page 20. Apparently the logic is that since people will be deciding to no longer be putting their kids into private school, they will work less hard in their 20s and 30s — presumably to the point of becoming SAHPs, although this is not stated explicitly — and so be earning less at the point where HMRC would expect to be taking the most money off them. This strikes me as extremely tenuous.

Here is someone from that well-known commie freedom-hating anti-British organisation The Institute of Economic Affairs, who thinks that the claims about the possible effects of this measure are overblown. https://iea.org.uk/in-defence-of-vat-on-private-school-fees/

A few people have already said they do that on this thread

Oh, I’d been led to believe by lots of posters that there would be no impact to my DC’s education by switching to state? So if the VAT is unaffordable to us, it makes sense to switch them when there is no impact to them and then we don’t need the wrap around hours that private gave us to enable me to work my job, I’ll reduce my job… makes sense, no? Less stress all round, less income but we won’t need to spend as much so works out for all concerned.

Someone else will get your job and they will pay tax on their salary. And they will likely spend their money on something which VAT is payable, so I am not seeing an overall loss to the treasury.

New info came to light.

Sorry if it doesn’t fit with your narrative (not sorry).