Private school : VAT : labour

[Usernamerequired123]

I have recently come across this petition. Not sure if many of you have seen this.

https://www.change.org/p/stop-labour-from-adding-20-vat-to-private-school-fees-and-forcing-kids-to-change-schools?recruiter=false&utmsource=shareepetition&utmcampaign=psffcomboshareeinitial&utmmedium=whatsapp&utmmcontent=washarecopy376858822en-GB%3Acv451328&recruiteddbyid=44b8f4b0-d22c-11ee-82d6-61cc5900aa84&shareebanditexp=initial-37685882-en-GB

To be clear, that's for not signing the petition at the start of this thread

Companies that provide tuition are not VAT-exempt under the current regulations so no changes there. As for individual tutor, music teachers and coaches even if they lost their exemption the £85k VAT threshold still applies. But it’s all FUD because Labour have made it clear that it will only apply to registered schools.

Private schools also benefit from the state paying bursaries for initial teacher training.

@ageratum1 that's a fair point re: those who are qualified teachers. Similar to medics who have benefited from training in the NHS system but don't remain in it for very long

Interesting. So do state schools, so on a very rough basis "it's a wash". Private schools also recruit a greater number of teachers from other fields who aren't qualified; for most state schools the requirement for a qualification is non-negotiable.

I think you're wrong - most state schools are now academies and can recruit based on skills and experience without having qualified teacher status

That’s my understanding as well. A lot of anti-private posters have often commented that private school teachers aren’t as good as state because they don’t have to have QTS. The majority of the state sector is now the same. Off topic, but I’d rather have a non QTS physics teacher with a specialist science background than, for example, a “qualified” PE teacher teaching physics.

Have they? Haven't seen that at all here. I think the anti- private feeling is ideologically driven.

Not on this post. It’s been frequently mentioned on other posts

Oh right, well it doesn't apply to most maintained schools!

To be honest as a parent, a good teacher is a good teacher is a good teacher... whatever system they work in. What would concern me though (if I used the private system) is that the terms and conditions particular around pensions can be less favourable. Many private schools have left the teacher pension scheme as they can't afford it and to be fair that's a very important factor for teachers who will never earn a fortune but have a far better pension than most if they're in the teacher pension scheme

What a weird conclusion to draw. On that basis is any non-essential purchase morally wrong?

I think she's saying any non-essential purchase should be taxable. I don't think she's quite so clear what she considers non-essential, and how that maps to many other VAT-exempt non-essential purchases such as

• non-essential food
• non-essential tutoring
• non-essential water (anything beyond drinking, I suppose)
• non-essential music lessons....
• ....etc childcare, nursery, overnight camps, school trips, drama groups, books,

That is a VAT principle already really - no VAT on basic foods but VAT on cakes etc etc., lower rate VAT on heating, no VAT on books, printing services, medical services. In my view the 20% VAT rate is far too high all round and should be more like 5% if we have to have it at all.

https://www.gov.uk/guidance/food-products-and-vat-notice-70114

Cake is zero rated (which means that there is no VAT on cake, but the manufacturers can reclaim the input VAT). We are already in a position where cake is considered more favourably for VAT purposes than private education.

With the proposed Labour Party change, we will be in a position where cake and honey are VAT free, but education is not. How on earth anyone can think this is sensible is beyond me.

Let’s tax education, but leave Jaffa cakes VAT free……. The rest of the world should be laughing at us.

I think we will have to agree to disagree. I stand by my point that private schools are a luxury and should not be subsidised by the government when there are so many children in poverty- it’s a slap in the face to them in my opinion and not justifiable ethically in any way. The money raised should be directed to those in need.
Others disagree and that is fine. No point me going round in circles about such an emotive issue.

@Janedoe82 but Labour have no intention of directing the money to the poorest. Any money raised (and it is highly questionable whether any money will be raised) have been promised about 3x over, but none of the promises focus on under performing schools or economically disadvantaged students.

private schools are not subsidised in the same way jaffa cakes are not subsidised, they just aren’t taxed. Jaffa cakes are a luxury item, while my child’s (private) education is not in the sense that anyone can survive without Jaffa cakes, it dc (with SEN) cannot be properly educated in our available state options.

You are morally against private schools for everyone apart from your DC though.
You attack private schools vehemently yet allowed your DC to get the advantages that you despise. Sorry I just can't take you seriously.
You can not use the system to your own personal advantage and then trash talk it.
If you feel so strongly then you should never have played the system yourself.

If we want to discuss the sense of the whole tax system, how about we start with how someone earning millions of pounds a year can pay a smaller proportion of their income in tax than teachers and nurses do?

Or the disincentive for anyone to earn more than £100k pa as you literally hand over anymore than that to hmrc 🙄. That’s why the nhs is failing the consultants won’t work additional hours as are they effectively unpaid for doing so. So they don’t bother. The system is ridiculous

People are often pointing out the problems and unfairness in the tax system. It’s like the child benefit system penalising single income households. Referring to your specific point though, this article is interesting and refutes this claim. It is, interestingly, published by the IFS (the same organisation which issued the report into VAT on school fees and an organisation which supporters of the VAT policy assure us is entirely accurate). It’s an old report but the same ideas apply. https://ifs.org.uk/articles/do-poorest-really-pay-most-tax

There is absolutely no logic in introducing a tax system which penalises education and treats cake more favourably. As far as I’m aware, no other country in the world penalises education in the same way. There is good reason for this; most people with even a tiny understanding of economics realise that education is a societal benefit. Some countries actually subsidise private schools by giving funds directly to them because they appreciate the value of a great education.

What would be interesting is if the IFS could do a report into how much VAT would be raised by adding VAT onto cake. I suspect the Labour Party don’t think that taxing Jaffa Cakes will be a similar populist vote winner.

Exactly. They don’t bother. We will have the same problems with VAT on fees. Parents just won’t bother working as much if they end up having to use the state system anyway. This may well be the straw that breaks the camel’s back for many higher tax payers. These are often people who won’t find it difficult to move countries.

Another way to think about it: private school families pay, on average, for 3 to 5 state school places per child based on 40pc income tax plus NICs plus the tax paid by schools....and that's just on the extra income they need to pay the average school fees, let alone the tax they pay (like everyone else) on the rest of their income.

"Private school families need to do more to support state schools". Nobody comes even close to supporting state schools as effectively.

I am not against private schools- if people choose to use them that is fine. Just pay what is due and don’t expect to not have to pay VAT! Not sure what is hard to understand about this.

Why do you think no other country levies tax on education? Why do you think the EU has made it illegal to do so? Why do you think some countries give you an income tax rebate if you use private schools?

If, as you claim, it’s such an obvious and expected tax to pay why is the UK the only country to impose it? Has the entire rest of the world somehow got it all wrong and only Labour are right? I somehow doubt that’s going to be true.

Didn't work well for Greece when they tried it
https://www.telegraph.co.uk/money/tax/greece-labour-style-attack-private-schools-backfired/?fbclid=IwAR1LNS9iqGNSE5SgS5BLEJ17_oR2ucl82cr5EP9sTIK_YkaFiuRmF2YHdZc