Whitehall “braced for private schools collapse”

[ICouldBeVioletSky]

Whitehall ‘braced for private schools collapse’ due to fee rises

Worth reading the whole article, it’s not quite as alarmist as the headline suggests. But as you’d expect, gov sources are talking it all down while the ISC is ringing the alarm bell.

https://www.thetimes.com/article/e6465c9e-d462-48cb-a73e-74480059a1f3?shareToken=05bf599cd4a2376fe3ce83cdce607100

I’d be quite surprised if some of the schools near us don't fold tbh. There will definitely be a contraction in the sector, I just hope those that hold on can remain a viable concern.

It’s utter stupidity to be enacting any policy that would need to be reversed instantly if we were to rejoin the EU and then lie to the public that it’s about taking away “tax breaks.

This is interesting. Would Starmer be allowed the VAT on education as an opt-out were UK to rejoin?

We are not going to rejoin the EU in the medium term

That argument only works for year 7, 11 and reception (and maybe year 3 where there are infants/juniors).

Applying outside of normal entry points creates effort and there was a half baked ‘protest’ by some private school parents to encourage people to apply for state school places they had no need for (they weren’t planning to move their children) just to disrupt admissions teams. It was an obnoxious piece of attention seeking.

Yes, my kid’s school took 8, two left for uni this summer. Funded by bursaries that will now have to be used to prioritise children who might need to leave if parents cannot find the funds.

I don’t know of any parent who applied for a place without needing it. I’m sure there might have been a few, but it wasn’t as widespread as people are suggesting. Some applied genuinely thinking they might need a place. In the meantime, their school might have offered bursary support or family members might have stepped in to help.

The director of the IFS stated that the amount predicted to be raised (which isn’t realistic anyway because of ridiculous assumptions) won’t make a difference to public services. It’s a relatively tiny amount. Not a penny has been allocated to school buildings anyway.

This is also economically idiotic as a take - the entire point of it is meant to be raising additional money - yet posters like this seem not to have understood that it only works if private school parents don’t move their kids!

It won’t raise any money at all if all the private school parents do what’s suggested here, it will only squeeze state education spending further while collapsing an entire business sector. Congratulations on obviating the entire point of it 👌👏 🤣

Probably not - we won’t be getting many, if any, of the “opt-outs” we used to have if we were to rejoin. What would be to the EU’s benefit in that? Brexit threw them all away!

You say that like it’s a choice - but if they have no money in their bank account o pay staff or the electric bill, how can they stay open?!! It’s a bit like saying mortgage companies should not evict families before Christmas or if the children have exams. Commercial decisions by utilities companies, catering companies, food suppliers will not care about kids doing exams.

That’s exactly what people have been doing; looking at what state places are available. However, they are being accused of wasting local authorities’ time.

One of the reasons we need so much additional tax take in the first place is to help pay for the disastrous economic effects of Brexit. But yeah, let’s punish a lot of children because idiots (not them) voted for it!

https://www.cityam.com/private-clubs-and-boarding-schools-abu-dhabis-plan-to-attract-ultra-wealthy/

Here we go. I am not exactly a hot shot anymore but even I have had multiple calls from headhunters for very lucrative opportunities to work in Abu Dhabi. And I am definitely not ultra wealthy. I am actually considering a stint in the future once all my DCs are at uni. In the mean tIme, I am not working more hours because I refuse to go over the 100k bracket and be taxed through the roof for nothing in return. I refuse to do it and many other people are too across society in all sorts of income brackets. All these terrible disincentives to reach your maximum output or give your DC the best education don’t work in the long run. I am strongly encouraging my DC to leave once they have finished their state of education. I am fed up with the way this country is run, full stop. And all the pretend goodie goodie two shoes in charge who did full on sleaze this summer cannot preach to the rest of us. I don’t want to live in a country that chooses Brexit and to tax disabled kids and education and let pensioners freeze and little farms go bust all whilst lining their own pockets. No thanks!

A d it won't even affect the uber wealthy anyway, they'll just pay the £65k to send their buy to Eton

The wealthiest families with children at schools like that won’t be paying the VAT. Lots have prepaid for several years. Some of the more expensive schools had to temporarily close their schemes several months ago as they were inundated with requests to pre-pay. Some of those schemes may get challenged, but many will succeed in avoiding the VAT. Those who will be hit hardest are parents who couldn’t afford to pay fees, even a term or so, in advance.

Funnily enough, a friend is moving there. They have had enough of the ridiculous tax burden, and VAT on school fees is the final straw.

Why will it be good for society if the megabucks public schools stay open, and the small independent single-sex day schools have to close?

It’s not a surprise when schools fail. Parents notice when their child’s previously 22 strong class drops to 16 and they act to protect their children. Often school that do close are massively below their capacity.

Funnily enough DH has also been approached about a job there and he’s considering for the reason he already pays £150k in tax for which we get eff all back directly (other than the hate on sites like this). Our kids go to uni next year, I finish my PhD and they’ve talked of teaching jobs for me in one of the many great private schools there (paying a shit tonne more than I’d get here).

Quite fancy 5 years there and saving enough tax free earnings to retire early.

To call a private school a charity fails to understand what charity actually is.

To say this is to reveal that you have drastically misunderstood what a charity is. Lots of institutions are charities - universities, third sector organisations, Oxbridge colleges, further education colleges, even churches - and state schools are also exempt charities under the administration of the DfE rather than the Charity Commission. Their budgets effectively work in exactly the same way as private schools, which are charities in the same way but under the aegis of the CC.

A charity does not make a profit, and any surplus is reinvested in the core business. Charitable foundations in education have existed for centuries and centuries before the idea of the modern Oxfam-style charity. In fact the paying schools were really the original charities, ever since the early modern period! Some private schools and colleges were founded in the sixteenth or seventeenth centuries and still retain their original charitable statutes today.

I think it is a bit alarmist. It's not simply to do with VAT, quite a few state primary schools face closure due to falling national birthrates. This will have a similar impact on private prep schools.

I'm amazed despite appalling human rights, people are happy to turn a blind eye and move to Abu Dhabi. I guess it's fine if certain people suffer horribly.....but god forbid well off people are asked to pay taxes

@wiffin yes, families with kids at private school have - comparatively - substantial incomes… on which they pay a substantial amount of tax already, whilst saving the LEA £7k+ per annum by not taking up a state school place.

And, btw, private schools are not ‘charities’. They are businesses that have applied for and been granted ‘charitable status’ in exchange for meeting very specific criteria (ie giving free places to children on low incomes, those with special needs, Ukrainian refugees; or allowing local state schools and CICc, such as the local footie club or Scouts, to use their facilities free of charge).

You do not suddenly run out of money one month. You know that the end is coming financially and do it responsibly over a number of months. Unless you do not care about the pupils attending your school.

The most well off parents at my ds' school have all paid the fees upfront to avoid the VAT.

Assuming they have paid 5 years that is 5 years of no VAT revenue from a faulty large cohort but 5 years of pupils potentially leaving the private system or not joining in the first place and need a state school place at the tax payers' expense.

What a great policy

Why are the schools supposed to care, if the government and voters like you don’t? You seem to think imposing a huge tax change mid-year with only three months’ notice is fine: why are you expecting the schools to have had loads of time to prepare and look after the children? They only received the actual proposals in October, three months before the start date; and such a massive tax change would normally be phased in over several years — which it hasn’t been, purely because it’s a voters’ bauble, not a fully costed, proper piece of policy. So why are you saying the schools should have costed this when the government still properly hasn’t?

@Juliagreeneyes the policy has been known about for ages. It has been talked about on here earlier than 3 months ago.
Some private schools will be badly run and will not risk assess and plan for the future. But hopefully most will.

I’m pretty sure that those who had hoped to avoid paying VAT by paying fees up front will still have to pay. VAT is paid at the point of service/purchase. There is no getting away from paying.

Our school has all the local schools using the pitches and the very new theatre. The school also sends music staff (mostly) into the local schools because they do not have the required expertise in many cases- primarily our drums and piano teachers and our choir master. The school sports hall is used for exams not just for our students but others. Several students come into the school to take GCSE Latin and other languages as their school do not offer these subjects. Our very small boarding school section has 8 students from Ukraine - since the war- and all paid for out of bursaries.