VAT on private school fees - ITS NOT ACTUALLY LAW THOUGH?

[BellesAndGraces]

Why is nobody reporting on the fact that the Finance Bill has still not been to the House of Lords or even been debated yet? All the reporting, eg in The Times, just says that VAT will be payable on school fees from 1st Jan but misses out the fact that this is not yet law - surely this is a key piece of information. Am I missing something??

It's completely solipsistic though. What else is it? Your experience of incessantly arguing about the topic on Mumsnet does not equal a wider general interest, and you seem unable to step back and see that. The policy is not controversial to any meaningful extent.

14% strongly disagreeing and 33% strongly agreeing, frequent articles in a variety of newspapers and 2 legal challenges against the government shows that it is controversial.

The variety of arguments against VAT shows that it isn’t solipsistic.

But you go ahead and keep believing what you want without taking in any information. Let's see how that turns out.

What do you mean "let's see how that will turn out"? We already know how it'll turn out: it'll turn out with 20% VAT on public schools. But you keep on "believing what you want" that somehow that won't be the case, or that enough people care about it as much as you do.

There have been many which are far more controversial.
As PP have said this is only controversial among a small minority.
But in either case it was in the manifesto by convention policies in the manifesto are never blocked by the unelected House of Lords

The poll tax was controversial.

VAT on optional services chosen by a tiny minority of the population isn’t controversial.

The political offerings for state-funded education of all types should be a lot more controversial than they are.

Well obviously. But how will it turn out after that?

How much VAT will actually be collected in the next few years given exemptions, schools offsetting input VAT, and pre-payment schemes? How much will the private school sector shrink over the next few years after that (more than 10% means it is costing the UK money rather than raising money)? How many extra kids will have to be transported out of county for state school and how much will that cost councils who are already close to bankruptcy? How much will waiting lists for EHCP assessments increase? How much will court cases against councils increase (remember, councils which are already close to bankruptcy)? How will workforce participation change in the next few years? (Sadly, I don't think we'll be able to identify the change to workforce participation and reduced UK GDP in 10-15 years due to students education being disrupted, so I'm only talking about parental workforce participation). How will measured social mobility change?

You know, the things Labour should have modelled before bringing in a controversial ideological tax.

The poll tax certainly was controversial! But it was 35 years ago, so doesn't really count as 'recent'.

Interestingly, that was in the Conservative manifesto too before they introduced it. But as people learned more about it, opposition increased.

I’m looking forward to the Great VAT Riots no doubt planned for some time in 2025.

Riots aren't really the middle class MO

Changing economic and work choices are.

Which do you think makes more difference to the UK?

Well the poll tax demos were pretty effective, given that it was, you know, an actual controversial tax that 80% objected to because it disproportionately affected the less well off.

It well and truly wiped out the Tories in Scotland for decades.

Well I’ve just paid the coming term’s fees with the VAT duly added. If I could ring fence the whole lot to be spent on improvements to state sector SEN provision then I would.

My child is going to grammar in September rather than staying on at private now. My second one will do the same - luckily both high flyers. I’m dropping work days down to 2 and putting lots in my pension so I won’t be paying any tax now at all and having lots of rest time which will be nice. My DH saw a financial adviser last week and is moving a lot of his business and money offshore so we will hardly be paying any tax. We have paid absolutely loads up until now. But this policy of envy and everyone cheering for it without a thought for the children it will affect is it for me - this country will get no more tax out of us!!

And out of a class of 20 in our private school 18 normally move up to the private secondary. 8 have decided to go to grammar and will likely get places, 1 is moving to state and 1 is going abroad so that’s a 50% loss of VAT in just one class plus the state will now have to pay for the education of extra children.

It affects about 1% of taxpayers. Only 7% of children go to private schools and only 14% of taxpayers have school age children.

So I imagine the effect would be minimal, especially considering the majority will just grit their teeth and pay.

Just as long as they don't clash with Glyndebourne or Badminton, dah-ling..

I'm not really sure what I think when I read replies like this. Well actually there's quite a lot of words going through my head but I'm too polite to post them.
I'm not envious of you. I'm lucky enough to be financially comfortable with kids at state school.
Your post reads as someone who could afford to pay the VAT but is choosing not too. Fine, your choice. If private school was so important to you for your child's future, you're now choosing to "get back" at the government by putting them into (what you must up until now have seen as inferior) state education. You're also demonstrating your privilege by explaining what you and your DH are able to do financially to opt out of paying tax. I hope you understand how lucky you are to be able to do this and that the vast vast majority of the population isn't in your position.

I am completely fascinated by the madness of private school parents outraged by this VAT change. These people are acting like it is a matter of crazy huge importance.

There was a letter in the Telegraph today describing ‘chaos’ and ‘turmoil’ - as though the policy hadn’t been trailed for months.

But most people are educated in the state system and therefore know that it isn’t really that important at all. Some more pupils in the state sector with pushy parent? Good, actually.

It will be fine.

It affects about 1% of taxpayers.
Nobody ever seems to consider overseas pupils.
Our local indy is a boarding school. During Covid it closed down and did remote teaching. The local naice supermarket was the unofficial school Tuck Shop and was almost closed down by HQ due to the drop in turnover.
I was told a few years ago that about 30% of the school was made up of overseas pupils; the website currently reports 20%. The school, meanwhile, now has offshoots in Asia so some pupils will be going there instead.
In conclusion: the country is losing foreign income, we will lose companies that supply the indys and we are losing the 'soft power' of influencing the next generation of moneyed entrepreneurs/investors. And meanwhile state education will not improve in the slightest.
It's funny how Starmer can rush in - unexamined - things like VAT on schools, axing WFA, etc but needs three years to think about improvements to Adult Social Care. Surely it must have come up on the agenda in the last 14 years in Opposition!
Is this another 'unexpected' item that has blindsided them?

But most people are educated in the state system and therefore know that it isn’t really that important at all
Wait until he puts VAT on University fees. You might change your mind then.

Surely it must have come up on the agenda in the last 14 years in Opposition!

It did. It was a popular policy and so it is being implemented.

Have the government said they are going to do this?

There are already private universities in the UK that don't have their tuition fees subsidised by the government, so you could say that this is just leveling the playing field.

why would a change to tuition fees for university change my mind about private school fees being eligible for VAT?

Not sure this is the sequitur you think it is

Yeah no this isn't going to happen and you know it's not. So it's not something that's going to convince the vast majority of the population unaffected by the private school fee VAT policy to suddenly get angry about it.

Of course not.

And to be clear for those at the back, VAT is not being added to private school fees. The exemption that private businesses providing an education service have enjoyed is being removed.

Those choosing to send their children to private education should pleased to discover that they're no longer to be considered in receipt of state benefits. Although judging by some of the comments they may have been quite happy to have viewed it as a tax exemption.