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 feel the same way in the "about to crash" sentiment. I think I might have been ok with this policy if it was a smaller amount, and then education as a whole was funded through a variety of means to spread the risk of the tax take, from multiple sources.

But to try to bankrupt part of a sector, without reinforcing the rest of the sector to receive the impact, is just to breathtakingly mad. It's literally the only source of education funding for the next year or two, yet by bankrupting their cash cow they are left with... Nothing?

Whilst I agree that hunting ban is irrelevant to this topic, I strongly disagree about significant policy decisions being taken based on popularity rather than thorough impact assessment.
Brexit got majority.

I'm a city girl, and don't know enough about the arguments to have an opinion on trail hunting - but I don't much like populism, so I see it as another black mark against Labour if they're just doing it to stir up class tension.

On the subject of populism, supporting a policy which singles out a small, unpopular minority of citizens - not because it's a good or fair policy, but because 'everyone else wants it to happen' - is a slippery slope. And very lazy thinking.

Because i want araminta to explain how fox hunting is relevant to VAT on school fees. I wasnt talking to you.

I don’t care about fox hunting @CeruleanBelt one bit, have never been in my life on a horse even, not upper class etc. but it is an example of a policy with arguments in both directions, yet the general public went one way and still goes one way. I assume that is why it is debated in state primary schools? Because arguments on both sides can be made.

The general public’s opinion on a matter that does not directly affect them is irrelevant, is it not? And if they are misled and lied to, then we all know the consequences of that.
If you asked the general public if they wanted the Government to scrap the charitable status of private schools, but that it would cost the Government 20 billion buying the assets, for example, then the opinions would be going in the opposite direction, most likely, would you agree? If you then asked them further, if they want the Government going forward to decide what is charitable and what isn’t, then what are they going to say?

So if you lie to the public and tell them VAT on private school fees makes money for state schools. Then it is just that - a big fat lie. Like the extra 350 million for the NHS on the side of the bus.

I wasnt talking to you.

It’s a public forum - anyone can answer any post no matter to whom it’s addressed.

The matter of who pays VAT and on what is everyone's business.

So far, there is no evidence that the public have been lied to about VAT on school fees. No evidence that it will cost us all 20 billion.

Theres no evidence that this policy is going to lose the government a lot of money. Granted, there's no evidence it will make a lot of money either.

All we have to go on with respect to the scaremongering about the cost to the economy is just a few people on Mumsnet (who all apparently work for the NHS) saying they're going to quit their jobs and spend more time with their children - which is great news for their children, their work will be done by someone, the taxes will be paid, the world will keep turning.

“The matter of who pays VAT and on what is everyone's business.“

If those in power are making value judgments and not applying it to EVERYTHING (all of education, all of health etc) - then what exactly is that? It is discrimination based on their own ideology.

They are not scrapping other VAT exemptions, it is only for a small subsection of education, that they have a personal bugbear with. That is what it looks like and that is reaching, it is into state control that I personally find totally unacceptable.

I'm aware of how forums work.

“So far, there is no evidence that the public have been lied to about VAT on school fees. No evidence that it will cost us all 20 billion.”

@CeruleanBelt - you are deliberately misquoting me. I stated that to scrap charitable status and to transfer the assets would cost a lot.
As far as I understand it, even if all private school kids went state it would cost the tax payer about 4 billion in educating them annually.

However, charities are charities if constituted as charities. If someone wants to found a charity for goldfish to give them a luxurious burial, by law, they are allowed to do that. It is not a question of your or my value judgment as to whether they are worthy, they don’t need my approval nor yours and not the general public’s either. As long as what they are doing is lawful.

In any event, the charitable question is irrelevant. These establishments are charities and constituted as charities and regulated by the Charities Commission, not the Labour Party.

Or... they'll have incentive to work to earn an extra 20% of school fees??

These threads all suffer from the same logic fail.

They are not scrapping other VAT exemptions, it is only for a small subsection of education, that they have a personal bugbear with. That is what it looks like and that is reaching, it is into state control that I personally find totally unacceptable.

Thank you for explaining. I can understand why you would feel this way.

I didn't deliberately misquote you, i just used the same number you did.

@Araminta1003 proposed a hypothetical question you might ask the public

"If you asked the general public if they wanted the Government to scrap the charitable status of private schools, but that it would cost the Government 20 billion buying the assets"

That's a different proposition to putting VAT on school fees.

Theres no evidence that this policy is going to lose the government a lot of money. Granted, there's no evidence it will make a lot of money either.

@CeruleanBelt So you do agree this policy has nothing to do with economy and improving state schools, but is a purely populist move that appeases people indulging in class hatred whilst doing nothing for state educated children 🙂

As far as I remember, channelling economic frustration of the masses onto a particular subgroup of the society never led to good results. Didn't work when the govt funnelled the hatred towards the Polish, nor towards "benefit scroungers", nor any other singled out group. The economy is going downwards and will continue to do so.

In the long run, you cannot win on hatred.

It's possible for more than one effect to be happen over different horizons or to people in different situations. Most economic research indicates that, in the short term, people work more after an income tax increase, because they have committed to liabilities which would be painful to break, e.g., their mortgages. However, in the medium and long terms, they work less as they adjust their lifestyles and spending, e.g., move to smaller homes. Similarly, parents with children already in private schools, particularly if they're in exam years, may work more in the short term to avoid the tradeoff of disrupting their children's educations. However, in the medium term they may adjust their lifestyles and spending by sending their children to state schools at the next convenient stage, or not starting private school at all.

No i don't agree with that. I believe that taxing a non essential service which is predominantly reserved for the wealthiest people in society is the right thing to do.

I said there's no evidence that it will make money, (there's also no evidence it won't). Money isn't the only reason to do something.

Pray tell me where and how. I'd love to have 48 hours in a day, too.

They're applying tax to some businesses. You're choosing to interpret that as hatred.

They're not persecuting people. People can opt out of private school, they can't opt out of being discriminated against based on where they were born.

It's a bit worrying that you can't see the difference between racial hatred and people having to pay tax on a completely optional service.

That's exactly what I said - this policy is not about raising money to improve state sector as claimed by some PP. It's about "other reason" 😂

but is a purely populist move that appeases people indulging in class hatred whilst doing nothing for state educated children

No, you said that. That's the bit i don't agree with.

I don't know.... cut the mumsnetting time?

I'm not all that interested in your specific circumstances but I think this idea that school fees, which vary hugely from school to school (as in hundreds of %, not 20%) are balanced on such a knife edge in all those household budgets that 20% rise crosses the ultimate upper limit causing mass exodus, is a joke. Most of you aren't going anywhere.

OK - I think I can answer the discrimination point.

If tomorrow, the Labour Party announced in the autumn budget that all parents with kids at grammar schools, faith schools and every single school that is single sex now has to pay £1000 a year to go to those types of schools, what do you think would happen?
We would then have discrimination against a type of school that is anything other than a coed comp school and a larger mass of parents in terms of percentage of the overall vote?

To me, conceptually, that would be not too different. OK it was not in the Manifesto. But the manifesto can be dismissed as it was sold on the basis of raising cash for state schools and breakfast clubs and teacher recruitment. So it was not very accurate.

Racial hatred?? Even fox hunting is more relevant to the topic 😂

“I'm not all that interested in your specific circumstances but I think this idea that school fees, which vary hugely from school to school (as in hundreds of %, not 20%) are balanced on such a knife edge in all those household budgets that 20% rise crosses the ultimate upper limit causing mass exodus, is a joke. Most of you aren't going anywhere.”

@napody - you are assuming most of these people do not even have mortgages. You do realise that when you remortgage, for example, school fees are included in the calculations? So some people will not be able to remortgage either. Adding 25% for eg 2 school children in one year, perfectly conceivable a ton of people will be utterly screwed.