Private School VAT Backtrack?

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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.

Around half of private schools don’t have charitable status.

I look forward to the literal barricades being manned for private education but I don’t think this is sufficient to alter the course of an entire election. My prediction is that it comes in, and the majority of people pay up for the increased fees they’ve already had notice of. The Conservatives can always campaign to lift it.

I agree this may not alter the election results in its entirety, there will be other contributing factors - a lack of trust in labour chief among them.

Cards on the table @Polishedshoesalways I put money on Labour winning 18 months ago and I don’t think your judgment is sound. I appreciate you may not like Labour, but honestly, I cannot take your predictions seriously. If I did, I would be changing my bets right now. I get why people do not like this policy but literally nothing I have heard on this thread suggests it will have any significant political impact to the majority of voters. Dislike of Labour is one thing - but a realistic appraisal of what they will do is pretty important since I think probably you’re going to have them in for a decade.

I disagree and you are way too complacent, and as usual with Labour they never seem to take the public with them, sneering at the high tax payers, piously tutting at anything remotely joyful, victim mentality and nanny state with grasping hands attached to the state nipple, rather than learning about personal responsibility. The pensioners will be next in line, for sure. Anyone that wants to make anything of their life at all is going to be on the chopping board. It won’t stop at PS that’s for sure.

It seems to be the only policy apart from maybe national service that is being widely discussed atm.

I wouldn't be at all surprised if it is pulled before the manifestos are released because it literally gains Labour nothing and loses them a whole load of votes.

I think it is also sending the wrong signals to the squeezed middle. Labour want to squeeze them harder. But they don't want to tell them that. This policy makes them feel uncomfortable about what other policies may be in store for them - and Labour don't want them getting the idea that they are going to be rinsed ahead of the election. They want that to happen afterwards.

They still get a corporation tax benefit as a charity/ non-profit

Basically, people misunderstand the charitable thing. Schools that are charities are really charities by virtue of providing education (which is a charitable objective) on a non-profit basis- the extras provided to the community are a bit of a red herring. Schools that are charities are usually structured as companies limited by guarantee - they have no shareholders (no-one owns them), so cannot distribute any financial surplus- it's effectively a closed loop. If income less expenses is positive, they don't pay tax on it but can only reinvest it in the school. Therefore people who say private schools are businesses are fundamentally incorrect if the school is structured like this.

Conversely, private schools that are not charities are effectively normal companies. If income less expenses is positive, they do have to pay corporation tax on the surplus BUT they can also distribute the profits to the shareholders who own the school.

Whether a school is considered a charity or not is 95% about legal structure and 5% about how often they let other schools use their science labs/ playing fields.

There is still a benefit for existing charitable schools to remain so, even if the VAT thing comes in.

I take a bit of issue with the idea that anyone with 15k at least to spend per annum is the squeezed middle?

Most if not all are comfortably off. Assuming that they are also not spending all their income every month. And if we are taking mortgage rates etc then the person to blame is Truss who did it deliberately to ensure rates went up. I don’t think the currently squeezed middle should be taking much comfort from a party that has authored the mess. One poster on this thread said their mortgage DOUBLED.

Absolute bollocks.

Many people are supported by bursaries and scholarships and might be needing to find 11k a year, grandparents providing half etc. That's forgoing a summer holiday, which many do. And do you think private school parents don't have mortgages?

Such blinkered, black and white thinking.

Most people won't be voting for the policy as most people don't vote on a single issue, as we have seen on MN in general.

So which is it? Foregoing a summer holiday does not sound like privation. 11k a year to be found but it can’t be? Squeezed or not? Relatives who are retired pay? Private schools are discretionary spending. A mortgage isn’t in the hierarchy of most people’s needs.

People can spend how they want. 11k a year being spent and you are struggling otherwise to meet the essentials is crazy imo.

Pretty sure on the whole private schools pay much better than state schools, they also offer various other incentives.

It really depends on the school. When I was moving here I looked at lots of job ads. A couple were in a private school and were offering lower pay than the state scale. I actually asked them about this. They said they felt they could offer a lower salary because it was such a nice place to work.

Many pay the same or less. Many have also opted out if the teachers pension scheme so offer much less competitive pensions.

Oh yes the pensions!

And some want you to work Saturdays too.

This is a really interesting clip about Labour and the private school tax.

https://x.com/bbcquestiontime/status/1796289801588490282?t=_WnISw2nCKyTwXNKPeXgiA&s=19

PS fees in general have been rising far above inflation for the last few years so you'd think they already had a cushion to cover the tax change.

Or perhaps that cushion which parents or schools may have had has now been used up by those fee increases and increased costs. The fee increases over the last 2/3 years are largely due to the problems with inflation which every area of the economy has had to deal with. Their energy bills have risen hugely. Changes the government has made to the TPS has led to increased costs which the unions have warned about. The cost of food has increased hugely. There are lots of challenges they’ve faced.

In that interview, Wes Streeting is still suggesting that this policy is going to raise enough funds to change the lives of poorer families. That’s simply not the case and is disingenuous at best.

It’s not remotely interesting

But infinitely nicer places to work, with longer holidays and well behaved children.

VAT will be a huge problem for us as our daughter is there on a bursary+scholarship and we manage the difference by being absolutely ruthless with our other spending (i.e. no holidays, no extra-curricular clubs, buy second-hand etc). Lots of similar families at the school. It will be such a relief for us if it's scrapped.

😂you don't find it interesting that PS have been raising their fees well above inflation already? And yet that hasn't caused a big stir?

Yes - there are definite upsides!

It has been explained to you why that might be - energy costs for one.

On another note, Streeting is a far better communicator than Starmer and has to be a leader in waiting.

That's not enough of an excuse.

Anyway for me the biggest issue is whether we prioritise the needs of a small number of children mostly from comfortable families, or the majority of children. It's about ideology over specific policies. I find it chilling that some people will put this one policy over all the destruction of the Tory party. Thankfully they are a minority.