Private School VAT Backtrack?

[SofaThrow]

There seem to be rumours swirling that Starmer has decided not to bring in the VAT on private schools until possibly 2025/6. After being very clear last year that there would be no phase in and that they would bring it in immediately.
Nothing is as yet confirmed I don't think.

I am surprised you think there is sufficient information to plan. From what I have seen there is consdierable uncertainty as to what exactly is included, whether Labour are seeking to alter the usual rules on input VAT and capital goods, how SEN will be accommodated etc. They have been clear that they want to implement VAT as a policy but there has been very little detail of the kind needed to allow schools to do actual detailed planning.

As to whether they have spoken to the civil service. Possibly but the access talks were rather late and as I understand it they are not intended to be a means of working out detailed implmentation plans. Certainly the initial ministerial interviews on VAT suggested that there was rather a poor understanding of how VAT worked (conflating VAT and charitable status, seeing the standard input VAT rules as a 'loophole' to be closed etc). In interviews they tend to say that they are relying on the IFS report rather than referring to their own work. Whatever the merits of the IFS report it is the report of one economist who note the uncertainty and limited evidence with which he is working. I would expect a responsible government to do their own homework before introducing a new tax that will disrupt any sector, particularly one responsible for children's education. I doubt they can do that kind of detailed planning until they are in government and can work properly with the civil service.

If Labour want to portray themselves as a responsible government in waiting, ready to implement well-designed, evidence-based policies then they would be better off changing their tone away from the 'we'll do it straight away' appraoch. Certainly the country could really do with responsible government and it's the main thing I'm looking to in working out my vote, I'm sure I'm not alone.

These objections are just chaff aren’t they? Because posters here are potentially affected, they seem to believe that a government cannot work out this stuff once in over the space of nine months. Not only is that plenty of time, but I would imagine it is more than is needed. There are some wild ideas about disclosure of legal advice (I can count on the fingers of one hand when any government has disclosed its legal position outside of court and they are entitled to same confidentiality as you would be btw). What this sounds like is special pleading: and one that is deaf to the reality that changing the law to actually make this work is exactly what government is about.

As provision for SEN; does nobody think that overall given this policy that Labour do not want to spend public money supporting the private sector to address these needs? I mean that is totally consistent with their values. This is why I do have a bit of skepticism as to whether this is about Labour voters, because really, the implications of their beliefs is that they don’t want to do anything such thing. They seem to accept that there is mixed market in education, but they want to improve the state provision.

Well you have changed your story quite a bit there but no matter.

I will say though that saying that £15k a year school fees are'cheap' when there is a col crisis says rather a lot about you.

they seem to believe that a government cannot work out this stuff once in over the space of nine months but Labour have been saying they will do it right away. This thread is about whether they will back away from that and take time to work it out properly. I think that would be wise and would be a positive indication that they will be a responsible government.

I am not quite sure what you mean about SEN. The problem that people are referring to is that Labour have said that they would make special provision for this group of students but very vague as to how. Some of the problems are set out in this paper https://www.edsk.org/wp-content/uploads/2024/03/EDSK-Obstacles-to-adding-VAT-to-independent-school-fees.pdf (about half way through). They have talked about using EHCPs but, as this paper makes clear, they apply in England but not the other UK nations. Further it's difficult to put into VAT law which tends to apply to the nature of the good or service not the customer. This is causing real uncertainty in planning, especially for schools with a high proportion of SEND students (including special schools).

What I can't work out are the claims from Labour saying they are not going to change VAT. But in fact by adding VAT on school fees they are changing VAT.

So which is it ? Are they changing VAT or are they not changing VAT ?

I really haven't changed my story. I think the issue is your comprehension.

Obviously I'm saying £15k is relatively cheap. You say it's average and it's what your school charges. I say it's at the cheap end - in the two areas I checked there were no cheaper schools.

You seem to be trying to twist things. I've tried to explain things back to you in simple terms. I can't be bothered to keep correcting your poor comprehension. As I said, I hope you don't teach English.

I doubt they know the answer themselves. It’s a shambles.

It will make a big difference to Labour - it will mean the difference between a hung parliament and a majority win ( with lib dens opposed to the PS VAT) So I suppose it depends on what pp want the most? To win outright or for Labour to have their hands tied for years…

Or maybe a slim win for the conservatives.

When you add up all of the parents, grandparents, family, teachers, staff, contractors, businesses linked and depend on PS then you are looking at millions moving to the conservatives to prevent this policy.

And of course all potential PS users - those with uni aged kids or soon will be and potentially those using private nurseries. All will have good reason to vote conservatives!

Yes the entire country is weeping at the prospect of removing state subsidies from a very privileged luxury product.

So I have resisted posting about this so far but I really hope they do scrap it and I am not wealthy, kids don’t go to private school, but I teach at a small private school and VAT on fees will probably mean that many small schools like ours don’t survive meaning I lose my job. I will certainly have to face the fact that I won’t be getting any pay rise anytime soon. Maybe that’s what Labour want - to force teachers back into state schools. Well they’ve lost my vote.

Obviously I'm saying £15k is relatively cheap. You say it's average and it's what your school charges. I say it's at the cheap end - in the two areas I checked there were no cheaper schools

You do realise that there are schools all over the uk - not just the two areas that you checked don't you?

I think this too. Hope so anyway.

State subsidies! You do realise PS parents are paying TWICE for the ‘privilege’?? They are paying for your kids and separately for their own. The same with heaithcare.

Jesus Christ the entitlement to other people’s money is insane on here.

Same with Rishi and the National Service (not that he's getting in but the point still stands) - would be a massive impact on universities to suddennly lose a load of forecasted 18y old bums on seats without years of planning. They would kick back massivley, as I imagine state school education/DoE is against the VAT on fess shambles. All a load of election blustering and lies to try and get votes.

What is has actually achieved is to make private schools even more unaffordable for middle income people because most schools have put their fees up by 8/9% 'just in case' VAT comes in. So less middle income people going and less people donating to bursary funds so less poor but able kids in with a chance of getting out of their failing inner city academies.

I hope Labour keep the policy because it means they probably won’t win! Look at how much the polls have narrowed, and that’s before Starmer inflicts himself on us on Tuesday!

I am SO looking forward to Tuesday! Let's see them under pressure a bit.

Ah and Rayner has just sided with Abbott - great timing - so a party split on the eve of the election.

I did think it was strange that Labour would so casually throw away up to 1 million votes (568,000 kids in private schooling, assuming both have 2 parents).

Ok some will be hardcore Conservative voters, but a lot of even them are fed up after Brexit/Covid/Partying/BJ shambles.

Exactly - someone has done the numbers and realised this spiteful agenda could cost them dear.

Plus a lot of grandparents paying fees, so that's potentially 4 adult voters per kid.

No surprise there. What a bloody shitshow our politicians are. I despair.

It’s the staff and groundstaff, caterers, cleaning companies, teachers, SLT and everyone else too. Not just parents that stand to lose jobs and businesses thanks to this idiotic policy.

Very true.

Yup a crater split just before Starmer steps on to the public stage. Hard lefties are fighting back, and have picked their moment with such care.