Why aren’t people angrier at schools passing on full 20% VAT rise

[Newbutoldfather]

From what I can read, schools can claw back around 5% of the 20% of the VAT rise and, arguably, for the rich and famous schools, more than that due to past capital expenditure.

And yet most of these are passing on the entire 20% to parents so, in effect, a sneaky 5% fee rise, on top of this year’s existing fee rise.

So, why no anger or threads on here about it?

Our school is passing on 12% from January. They are continuing to honour existing bursaries and scholarships.

They (and we) have yet to see the detail and have no idea how complex it will be to administer so I accept that it is hard for them to be specific.

I think we are all adopting a 'wait and see how bad it is' approach.

Isn’t that just a sneaky way of saying that schools had the option to lower tuition costs?

presumably, fees were set for a reason.

It's down to the politicians implementing a poor policy, most will realise that

@Ponderingwindow no, the schools will be able to claim back VAT on their purchases, so can offset that amount against the 20% being imposed on fees.

Our school has scheduled building works that they would originally have had to pay VAT on and was factored into future fees. Now they will be able to claim that back so can offset it against the VAT they charge.

@Ponderingwindow no, the schools will be able to claim back VAT on their purchases, so can offset that amount against the 20% being imposed on fees.

Our school has scheduled building works that they would originally have had to pay VAT on and was factored into future fees. Now they will be able to claim that back so can offset it against the VAT they charge.

Most are not upping their fees by 20%. I have heard Eton is. There might be others. But my daughter's school and others I have heard about are going for a lower %, precisely because they can claim back vat on capital projects and their purchases.

Ours are going up 10%

Schools don't have to pass it on, and many can absorb or off set it. People were outraged before they knew the outcome.

Maybe because most aren't?
One of our sons has just left but his school has already said it would be around 10%. The other has said it will be 10-12%.

It is hard to get facts as they don’t seem to be in the public domain yet, but I believe St Paul’s Girls are also going up the full 20% as are Eton’s. I thought Westminster’s were too.

Interesting that that isn’t the experience of most. The fees of the first school I taught in are going up 14%.

But I still see zero excuse for going up over 15%, and you would have thought some savings could bring that down to 12% easily enough.

10% here, NW coed

They’ve been increasing fees above inflation for years.

15% of Eton pupils are from overseas and have families too rich to care

why should they?

vat on services is 20%. Do you ask why your plumber doesn't charge you a lower rate given that he will buy loads of supplies and can offset the vat he paid.

I think it makes sense to charge the full 20%, then increase bursary levels for those who need it. A multi millionaire won't notice the 20%... but those scrapping by would benefit from targeted help.

@Talkinpeace ,

‘15% of Eton pupils are from overseas and have families too rich to care’

But that is like saying people buying £10-20 million houses don’t care if they go up 20% (probably true) but then that starts pushing the £5-10mio houses upwards and that drags up the £2-5mio houses. At each level the drag is less, but it still happens.

And that is the issue with private school fees. I assume Eton will build some new amazing facility with the extra 5-7% they have sneakily filched from the parents, and then schools like Harrow and Charterhouse have to compete, and them you look at the top London schools like Westminster and St Paul’s, and they don’t want to be left behind…

It is this mechanism that has been pushing private school fees up at way above inflation for decades (the fees at my top London school when I left mid eighties were £700/term-I remember as my parents went on about them).

And it really isn’t teachers’ salaries, these have been in decline in real terms for pushing 20 years now.

Yes I am sure some savings can be made in some schools (this often means redundancy)
But also costs rise. Electric, gas, teacher salaries, paper, bank loan interest have all gone up a lot recently. I can see schools making cuts to stand still as it were.

My state school accounts are just rise after rise.

9.5% for us on top of annual rise that had already been communicated. Noticeably higher class sizes than we'd always been promised though (Y3, year group has doubled in size, grammar area).

@dierama ,

‘why should they?’

That is a really strange way of looking at it, especially given the threads on here saying how outrageous adding VAT is and how much it would hurt parents!

They are not businesses. They are charities. Their function is to provide high quality education on a good value basis, not to be looking to gouge the fee payers.

The elite private schools clearly think their brand is so strong they are just going to pass on the full cost, pocket the reserves for bursaries etc. All you can do is vote with your feet and go state/to a cheaper private school and send the governors a strong letter on the way out.

By the way we have the equivalent type of thinking in the state sector. There were schools that went online during Covid asap even in state, got kids back in asap as soon as allowed, barely had any striking teachers - basically kids and parents first, and then there were the other schools who did the exact opposite. Where I live people still talk about which were the supportive schools and which were not. These things matter long term.

No threads because I'm sick of being bashed on here for doing my best for my child in an already difficult situation (?ND and extremely high anxiety).

Ours are still steadfastly refusing to tell us! Our fees went up 7% this term, and they've said they will aim to let us know "sometime around half term" about the Vat plans. 😡

The top names are now international brands with schools abroad. The government making them even more exclusive may attract more business from customers overseas (yes, I uses business, customer and brand ) Even if fees went up 40%, the top schools will be fine and have waiting lists.

In an ideal world they will increase bursary spending but whether or not that happens is another question.

I personally don't think there should be vat on private school fees but thats because Ive had DC in private schools (and still have one there).

However, the way that vat works is that you have to charge it on vatable supplies (which private education now is) but you can offset vat you have paid on purchases. It's just the way it works. So they HAVE TO charge 20% vat. What you are really suggesting is that they lower their fees (and then charge 20% on the lower figure) to take into account the fact that they can offset some vat (which sum will change from year to year and, after the first year where retrospective capital works could be a factor, will not be a significant amount). Why should the school reduce their fees just so that they have effectively subsidised parents?

Private schools are not charities in the sense that they are there to be charitable to all pupils. They reinvest the money they make into the school.

Besides, whilst I personally would have preferred that vat wasn't applied to school fees, you must be aware that there are millions who think it was the right move so Im not sure why you say that it's a strange way of looking at it.

However, the way that vat works is that you have to charge it on vatable supplies (which private education now is) but you can offset vat you have paid on purchases. It's just the way it works. So they HAVE TO charge 20% vat. What you are really suggesting is that they lower their fees (and then charge 20% on the lower figure) to take into account the fact that they can offset some vat (which sum will change from year to year and, after the first year where retrospective capital works could be a factor, will not be a significant amount). Why should the school reduce their fees just so that they have effectively subsidised parents?

Yes - was about to say this myself. School has to charge the parent 20% and then pay that to the treasury. The talk of "passing it on" is unhelpful. Our school is making this clearer by reducing the published fees from January, then putting the full 20% VAT on. The effective "VAT increase" will be around 15%.