Whitehall “braced for private schools collapse” 3

[ICouldBeVioletSky]

Starting a third thread to discuss impact of VAT on private school fees, as the topic looks likely to run (and run). Though probably best to finish off the second thread before posting here, thx.

I think the point is whether it is a human right for a particular group of people to retain a privileged choice, which a much larger group of people have always been barred from making?

For example, a privileged family might argue that it is their human right to take a flight to a holiday abroad, which has been their annual practice. A high tax on aviation fuel might deny that opportunity. On the other hand, less privileged families may never have been able to afford holidays abroad.

I completely understand that removal or reduction of a privilege feels like deprivation. But to claim it as a loss of human rights, where the vast majority have never been able to access that privilege, feels like a stretch.

Especially if they only raise the cost of the marriage licence for people of certain demographics - including those on higher incomes or with inherited wealth.

On the human rights angle, the Labour Party have specifically chosen to implement this policy in a way that is not proportionate thereby prejudicing their own case, ab initio.
So please everyone, if you are angry about this if it fails in court, you need to look at the implementation angle as well and whether they actually ever wanted this to succeed.

As a solicitor who does know something about human rights law (but is by no means an expert) I would wholeheartedly agree with this ^

Apologies, I agree with your point - that ‘common sense understanding’ and ‘legal understanding’ of the case are very different and so non-specialists should be wary of making comments on the legal arguments - and so will bow out.

It’s in the ECHR articles and applies to all the citizens of every signatory country not a subset, it’s not based on people’s feelings.

Good luck with this argument. They simply don't get that nobody is stopping them accessing the education, except themselves through their limited income.

Apparently their earning capacity is the government's fault.

They still can choose to privately educate, as long as they can afford it. 😂

We tried. 🙄

For those who are in Year 10/11 and 12/13 - if the parents could not afford to pay the VAT, the Government has stopped them from accessing education, no two ways about it. You cannot realistically switch school from January of those years. Many state schools won’t even take you!

Again, the fact Labour chose not to exempt these particular exam years is just completely bonkers. Flies in the face of logic and suggests they wanted to lose in court.

Excellent logic 🙄. The reason you constantly tie yourself up in knots trying to justify education tax, is because it’s unjustifiable. It’s blatantly a spite act against children because their parents are successful and this doesn’t sit well with some people. It’s exactly this totally unhealthy crabs in a bucket attitude that pushes people into independent schools in the first place.

Exactly @Treacletoots - what is your defence for Labour charging current Year 11 and current Year 13s VAT? There can be none. No state school would have taken them. They need to, at a minimum, refund the VAT for those years. Arguably even for current Year 12 and current Year 10s because frankly, you cannot miss a whole term of Sixth Form or GCSE course and still be taken and be “fine”.

When private schools raise their fees annually, do they exempt Y10-Y13 on the grounds of not disrupting exam years?

Fees pay for teacher salaries and pensions + utility n bills etc. 75% of expenditure in schools is staffing costs. That is going to increase with NI.
Over 50% are charities so not for profit, where do you think the fee assistance of bursaries and scholarships come from?

Also, my understanding was that schools had a free choice as to how to pass on the VAT. They could, for example, given the offset of past capital expenditure against VAT (a 1 off saving), have passed on this saving to maintain current fees for exam years.

Your understanding is obviously based on Labour spin!
Only schools with major capital projects over last few years can reclaim much. That's why this policy benefits the likes of Eton but disproportionately impacts small, local indy schools.
Most schools are having to pass on 15-20% because they don't have a big surplus/much capital VAT to re-claim. That's why all of the 18 which have announced closures since 1st Jan have been small schools

Labour have taken their hatred of the large, well known public schools and extrapolated across the whole sector when in reality, those types of schools make up approx 1% of all indy schools. That's why there are multiple legal challenges and why Labour are having to throw 4 x KCs at the largest challenge all at cost to taxpayer.

No - because the inflationary linked fee raises do not happen every year and are usually 1-2%, which parents factor in - not the 15-20% many schools are having ti impose if they don’t have enough VAT offsets to get that figure down.

The schools we attended usually notified us in January that fees would increase in September so that there was the time to apply for state school places/give notice/financially plan.

They also invited us to contact them if these fees rises were likely to be an issue in the short term, so for the odd parent where - because a child was in the final year of GCSEs or A Levels so moving them was hugely impactful - there was scope to apply to the hardship fund or arrange deferred payments. For deferred payment, some friends were still paying fees pack for a couple of years after their child had left. Obviously schools can’t offer this to every child simultaneously nor can they do this for outstanding fees equivalent to 20% of the due amount as they then become, in effect, money lenders and fall foul of finance laws.

So if you are looking for a gotcha on this, no, it doesn’t and never has worked like that.

You could argue that the fact this was in Labour’s manifesto did give really quite a long notice period? I appreciate that many hoped it would come in more slowly than it did.

Really? When it was no certainty that they would even win?
Remember, Labour originally said it wouldnt come in until Sept 25 but then in October brought that forwards to Jan 25. Could you cope with a 20% tax on your mortgage with 3 months notice?

This only works if they have VAT able items to offset. Many/most schools have not spent half a mill in the last 3 years on a new gym, theatre or boarding houses. Only the very very wealthy public schools can do this. ‘Normal’ independent schools are often in old buildings, in urban areas, with limited grounds and potential for capital development due to planning rules and already maxed out development within the existing footprint. Many do not have other income streams, such as renting out their premises for summer schools, conferences and weddings - again, this is just the tiny number of public schools with acres of land.

So, yes, the school my children went to were able to limit the impact of the increase to a 7% fee rise (a year after raising the fees by 5% because they had tried to keep fees level after their covid/CoL/fuel increases for several years) because they have a flourishing events and banqueting sideline and lots of VAT offsettable income/costs, plus had recently built a new science/lab block. But other schools locally have not been able to do anything to mitigate this other than withhold salary increases, reduce staff and defer necessary planned capital expenditure such as roof repairs.

Lots of things go in a manifesto and never get implemented. A manifesto is a wishlist - implementation usually takes time. They have given the vape industry 2 years to implement changes - why not do the same for school? No-one expected the policy, if delivered, to begin mid school year and almost immediately.

But other schools locally have not been able to do anything to mitigate this other than withhold salary increases, reduce staff and defer necessary planned capital expenditure such as roof repairs.

Sadly, exactly as state schools have had to do over many years. And while this is not, and should not be, a ‘race to the bottom’, it is not entirely just at a societal level that one group of children should have the best of everything with no restrictions while another group, equally deserving, steadily has their right to a decently-resourced education eroded.

It was, of course, wrong of Labour to promise no increase in personal taxation while knowing that so much of society needed additional funding.

I’d imagine any school that raised their fees by a 5th half way through a school year wouldn’t be around very long, which is of course the point.

It’s not a pissing contest - I was explaining why NOT all private schools have absorbed the VAT into their fees, not that it’s so unfair they have to make these financial decisions. But you know that don’t you? You just don’t want to get off script and accept that not all schools can afford to offset VAT as your labour party propaganda misleadingly claims they will be able to do.

And, just a reminder, those state school’s capital developments are funded by the taxes paid by private school parents and the unused £7,500 per child allocation that private school pupils cannot claim. My DH’s taxes could, alone, pay for a new gym and roof at our local state primary, which he does not begrudge. What we do begrudge is the venom with which people like you feel it is still not enough and that my children (yes, the SEN ones that got eff all support from that same primary school where the HT actually withdrew my child’s place when they were signed off school by their GP) are somehow ultra privileged at the expense of other children who are being funded by us.

Given this policy may cost money rather than make any, it sounds to me like you are just in favour of 'restrictions' because it's not fair that some people can afford to buy something?

Should we start restricting people from going on holiday to Disneyland or the Maldives or sticking some huge tax on it because a lot of people can only afford a week camping in Norfolk?

And not all private schools provide 'the best of everything'. Must tell my friend her DD's no frills but good with SEN school is apparently providing her 'the best', while my state comp child pops off to her free school horse riding lessons... (bit sad she's not taking up the fencing and archery options).