How's the Private School VAT increase impacting you?

[mumsthewordi]

To private fee paying ...are kids/s still in private ? Are you comfortably still able to afford and happy paying it ?

To state, how do you feel? Have you been impacted by more kids in class or would you expect that to play out this year? Or perhaps you weren't supportive ?
Do you think state schools will improve ?

Full disclosure
A struggling fee paying parent of one kid only other is at state and my oh is an amazing secondary school teacher - we are a divided household indeed at time, but we've made choices best for us.

Music and art are taught in state schools

The state schools near me teach mandarin, as does the state college. What world you the living in?

For gods sake read my actual comment. I never said they aren't

No one is mentioning that side effect.because that's just not how VAT works. Schools effectively cannot raise capital (unless the super rich make massive donations, which is unlikely for most normal schools), so can only spend their income. The whole or nearly whole of their income is now subject to VAT, so even if they were to spend most of it on capital works they would still pay over to HMRC more VAT than they would recover from the capital works. And bearing in mind that the biggest cost for any school is staff salaries, they will still be net payers of VAT by a significant margin.

Please, please check the prepayment point, and don't rely on it. There are chunky anti-forestalling measures in the legislation specifically designed to prevent avoidance through pre-payments. Any school worth their salt would have put provisions in place to recover the VAT from you if the scheme doesn't work. It definitely doesn't work if you paid after 29 June 2024, and still might not work if you paid before that date.

@WutheringTights - most of the capex at my old elite (private) school (only attended for Sixth Form) was always raised by donations - they are gift aided (tax grossed up) or left in inheritances (tax free) or wealthy foreign donors and now will also be VAT efficient. Win win for the schools. I think perhaps the business rates is more of an issue for them, than the VAT. They can handle the VAT. With the business rates I guess they will have to get creative and rent out boarding houses in the holidays to hospitality events potentially, weddings etc, there could be a whole market. Cambridge uni etc all do it as well. So rather than offer it for free to local county groups and music events for free, it will have to be a business venture.

Also, how is HMRC going to investigate all prepayment schemes in detail if they cannot even register some private schools for VAT on time? Big joke all around. Or they are going to hound private schools and let real tax dodgers off? Great look for them and they will have the social media police after them if they do so.

This is a terrible policy, not thought through and ideologically driven.

For goodness sake, having state school doesn't automatically help university applications. Positively discriminated university places? You clearly have no understanding of widening participation.

You sound very gleeful about the fact that there is is such a disparity between decent and poor state schools.

“This is a terrible policy, not thought through and ideologically driven.”
I’m not sure why being ideologically driven is a negative. At some point you do have to think about what’s right and try to do it, don’t you?

@schooladmission - have you double checked that all these parents are still in the country paying taxes? Or simply left full stop to go elsewhere, given it is London and lots of international people may have just left? Have you actually tracked that?

Yep, if the ideology is that the priority is for state services to be repaired after 15 years of defunding and decline, then being ideological seems ok. It's why they were elected with a massive majority, hopefully they manage to act on it.

Funny how they pick and mix their ideology though isn't it. Private healthcare good Vs private education bad. Tax education but don't tax private healthcare.
Nothing to do with 1 of their largest donors being the owner of a private healthcare company?

“Yep, if the ideology is that the priority is for state services to be repaired after 15 years of defunding and decline, then being ideological seems ok. It's why they were elected with a massive majority, hopefully they manage to act on it.”

It is a fine balance - many rich people and businesses leaving never led to better services. It’s turkeys voting for Christmas. Look at the cost of long term Government debt right now- they have screwed it up already. But keep on with your wishful thinking.
Unless you get inflows and more productivity and larger tax take and efficiency it is on a downward trajectory, all this right wing political stuff going on - it’s largely economically driven. Europe cannot afford the socialist state model for all anymore and so the political landscape changes. The Italians will knock our millionaires and we will be screwed. It’s important to understand how your bread is buttered.

It’s very sad for all the children having to move schools and have their education uprooted. I know 2 separate families that have moved both children now happily in state.
I agree with the vat but feel very sorry for the children having to move loose friendship groups ect.
It’s been a long time coming labour announced it years ago that and increased fees of roughly 5% but actually a bit more were factors in which we made decision to move ours after nursery we are not wealthy enough to have fees, live life and have that buffer. Plus my wild child would have spent his whole childhood outside the headmaster’s office for his latest misdemeanour or sarcastic remarks. 🙈

It's another VAT thread full of all the same people and the same stories/examples/closed schools and arguments! Hurrah!

Then scroll past and don't engage

There are spaces at both secondary state schools near me. If pupils join them from the private sector it will be brilliant.

The school budget will increase! At the moment cuts are looming due to decreasing school role (various reasons why, none to do with the school quality IYSWIM). One school could comfortably take an extra 200 pupils spread across the six years.

That would be awesome and would add c£1 million to the budget benefiting all pupils.

The school budget won't increase this year! Budgets don't increase or change during the year, only when they are re-allocated for a new school year.
Where do you think the money comes from for those kids? The taxpayer. Each child moving from Indy to state costs the taxpayer 7.5K per year (much more if SEN).

I agree on this, and I disagree often with izzy

Private school parents aren’t magic campaigners above and beyond what current state school parents can do

@twistyizzy

I don't care that the money comes from the taxpayer.

I'm a taxpayer.

I know that a bigger budget for our local secondaries will benefit ALL the pupils.

I actively want the 2 secondaries near me to have a bigger budget - because that benefits so many. Not just the pupils at the school either, there's a ripple effect in the community.

Bring on the extra pupils!!!!

The impact won't be seen yet as the election took place after the start of the autumn term so any movement will be in September 2025 or at a suitable point ( ie after GCSEs).
I'm seeing lots of adverts for additional open days from schools that used to be heavily oversubscribed.

In my city the private high schools are all around £15-20k a year. I have lots friends in both sectors, No one mentions it. No one I know of has moved schools. No sign of cutting back holidays etc

@twistyizzy and it would even be brilliant if families moved into the area to be in catchment.

Increased revenue via council tax for the LA.

£7.5k per pupil is higher than we get. 🤷🏼‍♀️

@SheilaFentiman no, if course not but clearly this small percentage of parents are capable of making.a disproportionate fuss (see the number of Mumsnet threads/articles in the Telegraph about this topic compared to how many people are actually affected!) so who knows what could be achieved 😉. Besides which, the more engaged parents in schools the better.

And to hell with the kids who have to move schools?