Thread 2: VAT on school Fees- High court challenge

[EHCPerhaps]

Following on from thread 1
https://www.mumsnet.com/talk/education/5160565-vat-on-school-fees-high-court-challenge

Background to legal challenge (not yet a case):
https://www.dailymail.co.uk/news/article-13824931/amp/Single-mother-autistic-child-launches-High-Court-challenge-Labours-private-schools-VAT-raid-claiming-violates-daughters-right-education.html

Sorry to begin a new thread, OP, but your thread filled up very quickly!

😅

We're becoming Russia or North Korea now.
Combined with Labour halting Freedom of Speech...

Edited to add - there's no hope in hell that parliament would stop VAT policy. It's majority of WFA vote which is worrying, I'd like to believe many more Labour MPs don't support it, but they voted still

Regarding Eton, Rolex is a charity. The more exclusive it is, the more sought after it becomes, the more the club doubles down and sticks together. They will keep their trade secrets as well and as they have hundreds of millions to play with in their endowment, this won’t harm them. It’s literally marketing for them.

Meanwhile all the small SEN schools that are charitable and do not currently make a profit, will be harmed. They fulfil a vital role for some children where the State has failed.
You are literally playing into the hands of private equity SEN schools that will overcharge councils when the house of cards comes falling down. Because they actually are run for profit.

In the mean time, Chinese companies are making vast amounts of cash supplying highly addictive vapes to our vulnerable teens and we have literally no idea what the long term health impact and costs for the NHS might be, let alone for councils cleaning up toxic battery waste. Now there’s an urgent social harm that may actually be worth taking urgent action on.

@katinthehattt "The state wins 3 times over if I manage to keep my kids at their private school, as I'll have to wind up my CIC and return to salaried work to keep up with the fees. So they'll get to tax my salary. Then the VAT on top, then the £7k per child we're not costing them for state school places,"

The state wins a lot more than that. If you pay full fees you are probably supporting children with various fee remissions, thereby relieving the state of the cost of their education too. Then there is a whole chain of people, goods, and services paid from fee income and then taxed. The ISC reckons that affiliated schools contributed £14.1 billion to the UK economy in 2021.

If my arithmetic is correct, improbable though it may seem, that is north of £26,000 per child. The govt. are behaving like student activists, and win or lose in the courts this will come back to bite them.

It’s not being pedantic. It’s a very important difference where VAT is concerned and makes a large difference. This is the problem with this policy. Too many people with very strong opinions in favour of adding VAT to fees don’t understand the very basics.

What about caviar? Cake? First class flights? Presumably you view these as being “subsidised”? They’re definitely luxuries, and none are subject to VAT. Is the taxpayer “subsidising” private healthcare?

This policy means that those scrimping to pay fees will be hit with a tax penalty, but multi millionaires having caviar for lunch and flying across the world in first class luxury don’t have to pay a penny. Utterly ridiculous. The rest of the world must be laughing at us. What economically competent and civilised society taxes education but not caviar?

@DadJoke
if private education was banned, there’d be a lot more wealthy people with spare cash which could be taxed and put into state education,

School fees are paid out of taxed income so why would there be more cash to tax? It’s already been taxed.

The thing is that parents with a certain amount of disposable income and DC with SEN needs but could cope in mainstream made a choice. To pay for private rather than apply for and appeal if refused EHCP.

A lot of parents can't make that choice because they can't afford it or because their children can't cope with mainstream that doesn't provide specialist education.

Wasn't there a BBC report this week that something like 3/4 of parents with SEND DC had to give up work?

There are lots of us with appeals and tribunals and SEN!SOS JR under our belts, failed special school, bespoke packages etc. Lots of parents who have lived the stress and are now full time carers. VAT on private education means nothing to us. It would not change things one bit. Because it is not an SEN issue to the most severely affected.

And you want us to support you because your bail out option now costs more because VAT subsidy has been scrapped?

I think you may be wrong on the last point. Firstly due to the falling birth rate. If absolutely everything stayed the same then the projection is there would be c. 172,000 fewer pupils in state schools. Assuming that the proportion of pupils educated privately remains the same you would expect the number of children in private schools to fall correspondingly.

Secondly, cost of living issues (and increased mortgage payments which haven’t yet hit everyone) and inflation meaning schools have already increased fees to cover running costs may well affect numbers as much as whatever gets added onto fees as to cover VAT. Although given the income distribution of families in private education, this might be a small % of the small % of the total school population in private education this probably looks very small in raw numbers.

All income is taxed multiple times. I mean, we could up the top rate of income tax or change capital gains tax to match income tax.

I meant no real decline in places due to the VAT increase. Other factors are a much more powerful influence on fees and school numbers, including demographics. People will just have to stump up.

Oh, I'm all in favour of increasing the scope of VAT - you are pushing against an open door.

Exactly. It's such a bizarre claim on these threads and the wrong way round.

People pay and don't use the state place.

The VAT exemption is a state subsidy.

The total cost of abolishing public school (a separate issue) would only be £1.38bn annually, and would be well worth it. If could be funded many times over by increasing tax on capital to match income.

These two things are separate issues.

you are speaking as if you have literally no idea how being pushy and middle class affects your access to services and improves services for everyone.

In what why does making the best state schools even more competitive attracting parents with funds actually help those who then can't get access?

This policy just exacerbates the issue for specific schools

Such a race to the bottom.

It’s clear we (society, the population, infrastructure etc) need a huge injection of cash. VAT on fees is a done deal. No point fighting it. We now need it on music lessons, sports lessons, nurseries, private tutoring and wraparound care. If we are going to tax education let’s go all in and plug the gap in public funds.

Any parent paying for anything outside of compulsory state education needs to step up and take responsibility for this. We need to charge VAT on uni fees too. And care homes. Also if you pay for a carer to come into your home.

All the things.

It's not a state subsidy. Some countries do actually do a REBATE which is a state subsidy

This lowers the state burden. Only the UK electorate is nuts enough to buy this line about tax breaks

@DadJoke - would you make homeschooling illegal as well then?

I live in London where there are a lot of Europeans and Asians especially Indian professionals of all kind sending their DC to private schools. I am sure they won’t just pay up, I think they will move back to Singapore, Dubai etc taking their jobs and salaries with them.

Worth considering - Sweden has done this, but I think strict regulation and inspection works, to make sure kids are getting the standard curriculum as a minimum.

Out of interest, the additional rate tax payers, have we got any information on their nationalities? I would really really like to understand the flight risk and possible impact on us economically. I believe it to be far higher than is acknowledged.

@DadJoke "The VAT exemption is a state subsidy. The total cost of abolishing public school (a separate issue) would only be £1.38bn annually, and would be well worth it. If could be funded many times over by increasing tax on capital to match income."

Define subsidy.

There are 0.6 million children in private schools; show your working out.

4.7 per cent of private school pupils have parents abroad.

• “there are a projected 5.6 million higher rate Income Tax payers in tax year 2023 to 2024, which is a 40.7% increase compared to 2020 to 2021. Higher rate Income Tax payers make up a projected 15.6% of the overall Income Tax paying population in 2023 to 2024
• there are a projected 862,000 additional rate Income Tax payers in tax year 2023 to 2024, which is a 99.2% increase from 2020 to 2021. Additional rate Income Tax payers make up a projected 2.4% of the overall Income Tax paying population in 2023 to 2024”

https://www.gov.uk/government/statistics/income-tax-liabilities-statistics-tax-year-2020-to-2021-to-tax-year-2023-to-2024/summary-statistics

99% increase!

@DadJoke - I am very clearly talking about those currently tax resident in the UK, using private schools but have dual or triple nationalities. There are so many of them in London.