Labour’s plans for VAT on Private Schools

[Busydadof2]

The Labour Party has proposed introduction of VAT on private schools.

In the scheme of things the money they will bring in from this is tiny compared with total expenditure on state schools, while it will drive more burden on the state system as some parents leave private schools. I think this is a populist ploy to get traditional Labour voters to vote for what is in any other sense a centrist party.

Have you considered signing this petition to make sure the policy gets scrutinised and the weight of public sentiment against it is known?

Change.org petition: Stop Labour from adding 20% VAT to private school fees and forcing kids to change schools

www.change.org/p/stop-labour-from-adding-20-vat-to-private-school-fees-and-forcing-kids-to-change-schools

Various perspectives from the signatories of this vote come to mind and resonate with our own situation, including this: “I work in a state school with over 30 in a class and oversubscribed. My 2 kids went or go to private schools and we have sacrificed loads to do this. We are NOT wealthy, many of the kids at the school I work at live in bigger houses and have much more disposable income than we do. We chose to send our kids to private school rather than live in a bigger house instead of our semi detached on a main road. We holiday in the UK every year and I work full time. I buy my clothes on the high street or in charity shops. Many parents at the school my kids attend are in exactly the same situation. I agree there are some very wealthy parents there too and the addition of VAT will not even make an impact on them, they will pay it without batting an eyelid. All this will do is push the kids like ours back into an already oversubscribed state system, increase class sizes even more and create a bigger divide as private education will become truly elitist.”

@SouthCoastDad

What's an 'independent' state school?

Apologies Independent was typed in error, I meant local State secondary school.

Hear hear! Very well said.

And no one looks at your car or how you are dressed before they decide whether to charge you vat on other goods and services. The cars people drive and how they dress are irrelevant.
You decide if you are going to send your child to a private school or not. If you do not want to or can not afford it you send them to a state school. Simply because you want something you can not afford does not mean that vat should be waived.

Can VAT be charged on private healthcare too ? It seems that also gets away

I think it should be charged on private healthcare.

In which case the provision of VAT on education will ultimately need be considered applying to University fees too.

It's an ill thought out policy.
The VAT reclaim going back 3 years for normal expenditure and 8 years for capital expenditure will cost millions and nobody's from Labour has confirmed this value. (Circa 40% of school expenditure will reclaim vat going back years).
Also the CEA will have to pay another £16 Million in charges.
It is likely between this and VAT reclaim it will cost hundreds of millions, which will take out of budget for additional state resource. The levy on fees will drip feed in over time so quite a hole to plug.

Money being passed down through inheritance has already been taxed. What is the incentive for these high earners to earn what they do and invest etc if they are effectively punished for the frugality? They will either simply distribute their wealth much earlier or choose to not be high earners/invest in the UK etc and all of UK society loses.

I am yet to see a multitude of threads focused on how to increase aspiration and earning potential, what government can do to incentivise young people to start businesses, how to get into high earning careers, how we can move from a low wage economy, how we need to hold the government accountable for creating an environment where ONLY 5% of the entire UK population earn £87k and above!

A whole lot of threads on how to spend other people's money and anger at what this tiny proportion of the population can afford....

Not this post

The U.K. are the only ones to use the gimmick, sadly we have a party who have been out of power for a long time and prefer poor policy over sense

@SouthCoastDad I have seen that argument before. Can you please point me towards the state universities where my child can attend for free?
It is totally different and you know it.

State schools provide a free education open to any child.
Private schools exist and charge fees for those parents who want to send their children there instead. But they could use a state school. Private schools are a choice for those with the money.

Universities are grant funded partly by the state and everyone pays something to attend with the limit on fees set by government policy. There is no alternative.

I am setting it out logically so you can see that universities and private schools are very different and your argument is not the gotcha you think it is.

@newmummycwharf1 I’m struggling to find my tiny violin 🎻🙄

I have signed and shared.

@newmummycwharf1 no one is spending other peoples money. It is your choice whether to use a free state school or pay for a private school. I do not care what you do. This is simply about ending a tax subsidy of zero vat.

And the whinging and moaning and complaints about a policy to end a tax subsidy are beyond belief. You would think the government are planning to abolish private schools the way some of you are carrying on. If you spent the time you are all moaning working some extra hours instead, you would soon cover the vat on school fees.

I admit though I have a visceral reaction to whinging and hyperbole. And there is a lot of it in this discussion.

Both of mine are in private for needs based education. I would have loved to stay in state but even LEA (equivalent) said nothing suitable for them. I'm definitely left leaning politically.

I fully agree with the 20% VAT rate increase. I think anyone who is eligible to pay tax but does not, should be unable to use services.

Tax is incredibly important to keep this country running and what we have chosen for our children is a luxury, we have chosen to pay for small class sizes and a nurturing approach to SEN because they have the time to do it, and are not dealing with behavioural issues. I know how privileged we are and I wish every school was resourced to the point where this was normal. I was a state school teacher and know that with the best will in the world it is often difficult to provide what your child needs without having to pay.

It's a terrible situation brought about by chronic underfunding and undermining of the education sector by the government.

I think the tax is fair, even if it is just to acknowledge the strength of feeling. The optics are important. It won't bring in very much money at all (relative to overall budget) but it demonstrates that those with more (and they do have more, no matter the sacrifices) should contribute to all of society.

I realise why this is headline grabbing and why they are going with it, but I do also really really hope that they are going to tackle the loopholes people use to reduce the tax they pay. I know very few people in my social circle who don't use an accountant to navigate the law, and yet it is completely legal (although I think morally it is indefensible). This would raise far more money than the 20% and would make society more fair through providing better services for all.

I realise I am a hypocrite for sending mine to a private school, I just wish I didn't know the reality of sending children into a sector which absolutely works against them. But here we are and very few people are willing to sacrifice their child to make a political point. All the people I know who say they would send their child to a state school on principal also happen to have bright, articulate children with no support needs. I don't have those children, I value education, we can afford it, so they go private.

No violin needed here. I dont care either way about the policy as me and mine are good and sorted. VAT or not - wont affect our education or life choices, or healthcare choices for that matter. Our values are very different from what seems to be pervasive on here. And we are privileged (and intentional) about always being in a position to contribute significantly to society. And raising our kids to see that as their responsibility too

I do find the strength of feeling on the VAT issue by some odd (not all - in real life, most people I know dont feel strongly either way). A sort of glee that some people may be priced out. Not realising that will not improve their own options or even societies options or progress. The focus and energy should be elsewhere if equality of opportunity is the goal

@newmummycwharf1

You keep referring to things as 'choices.' That's the thing you're not seeing. They're not choices the vast majority of people can make.

OP
We will need many more petitions if they come into power as they do not favour asperations by the ordinary man in the street.

There isn't loads of glee on this thread about people being priced out is there? Maybe the odd comment. Mostly it's a shrug and a comment about yes, that's what it's like for the rest of us. Is that glee?

You're right, the Tories on the other hand are absolutely all about supporting the aspirations of the ordinary man (& woman?) in the street. They've been doing such a bloody good job at it

Indeed yes. What you forget is and I am tiered of posting this on MN - Tories are more in favour of those that own their own home, have a second home and or cash in the bank than Labour. But I guess you knew that already

Challenged yourself to a question = which politically party had an income tax rate of up to 83%

The logic is that the reason that both University and independent school fees are currently exempt from VAT is because the supply of education is exempt.

The treatment of both forms of educational supply is dealt with in the same way in the current VAT regime: https://www.gov.uk/guidance/vat-on-education-and-vocational-training-notice-70130#section3 (see especially paragraph 3.1).

In order to impose VAT on independent school fees it will be necessary to change the law and VAT rules in a way that could be used in exactly the same way to allow University fees to have VAT added.

That does not mean that VAT will be added to University fees as it is perfectly possible to design the law so that it does not apply to higher education or so that it only applies to indepdent schools. But it does put in place the legal regime that could also extend to any form of educational supply with a simply amendment. Once that has been done and the rule that education is exempt from tax has been abandonned then the matter is clearly open for debate. You make an argument against, others might make an argument for (given that University education is a privilege that many do not receive).

The argument is not that VAT on private schools entails VAT on university fees but that it paves the way for doing so.

Not sure where I have said everyone can make those choices. Those who can do. As someone upthread said - if you can afford it, you buy it. It is a choice for you. Not for others. And we all do not have the same choices for most things. Money is part of that but there are many other reasons some have certain choices and others dont. And with regards to money, there is a whole lot that can be done to encourage growth and aspiration in the UK and we need more discussion and threads on that.

If the goal is that every child should have the choice to go to a great school - that is where the energy should be focused on.

Not sure how Mrs B pulling her kid out of private school due to VAT helps me or anyone - it will not improve the situation in state schools.

If it is not jealousy or some sort of level down mentality, then it must be that they believe VAT will help improve state schools. And it is the latter that I dont believe and Labour needs to show categorically it will happen (we know it wont). So add VAT or whatever - but fix the problem in state school as a priority and show us HOW you plan to do so before you become worthy of our vote.

I agree.

I think private schools shouldn’t exist and fully support the tax.

However, they do exist, and when it comes to it, if I believe they would be a better choice for my kids then I will likely use them. And I won’t begrudge the extra 20% if I can afford it and choose to pay it. If I can’t afford it then that’s a shame, but that’s just life isn’t it. I can’t afford a Ferrari either but don’t believe I should get a tax break so I can have one.