How much VAT is being passed on?

[VATponderer]

I’m interested to hear how much of the VAT is being passed to parents to pay. At our school (in Scotland) they’ve confirmed the fees will rise 20% in January to cover both VAT and increase in National Insurance.

If your school has confirmed they are passing on less than 20%, what % are they going with and how are they making up the shortfall?

I need to understand more about what our school has investigated in terms of cost savings. There’s no big cash reserves to subsidise it so it would need to come significant spending cuts. And of course that then would impact the education our kids would receive (eg less specialist teachers).

Interested to hear how other schools are managing it.

Schools that have major building projects already committed to, or that they have just completed, will be able to claim back the 20% on building costs for example, which you can imagine would be significant. How much is 20% of a sports hall or science block?

This is all theoretical though because our school hasn't been able to register for VAT yet. Lots of schools are in the same situation. The Revenue simply weren't ready. Which, coupled with the ISC action, makes me wonder whether it will actually happen in January.

There's only nine weeks to go, the legislation hasn't got through Parliament yet, and Christmas takes up a week.

I’ve wondered that too, how will this practically happen in a short time scale? It’s been a vote winner for Labour though so I’m not entirely confident it will be delayed. It will be seen as a big win to push it through so quickly.

There’s been no big building projects at our school (smaller ones yes) so no windfall due from that for us.

The rules say they can claim back VAT on capital purchases going back four years, and VAT on services going back six months. So new computers, new sports kit etc.

It's not just the VAT, it's the business rates relief that's going as well so we will be lucky if the raise is only at 20%. Of course, all this will do is mean that for those of us that can stay in the private system it will just be more exclusive. It's all very silly,

Business relief rate has already been removed in Scotland so it’s ‘just’ VAT and NI increase to navigate. Are you still waiting to hear what your school will do?

We have only been told c14% pre budget, however I also work in a different private school and I am concerned about going back to work after half term and finding out that my hours have been cut to pay for this.

Yeah we are in England and still waiting to hear. And it’s a moveable feast isn’t it. What they don’t do now they may have to a future date.

We were told there would be a 9.5% increase from January (on top of a rise previously communicated for this academic year). I suspect this may change.

12% rise from Jan in our school (London). School reducing fees to absorb the 8%, but haven't explained yet what, if anything, will be cut.

They have also emphasised that from next year onwards fees will rise at the usual pace😱

BTW there is a similar thread here
https://www.mumsnet.com/talk/education/5150296-vat-on-fees-can-we-have-another-thread-with-numberstype-of-school-only?page=1

The 5% rise that was announced just after Easter will be removed, and 20% added. So net 15% but no ideas what shenanigans are going on otherwise. There's been zero commentary on any attempts to cut costs but bursaries are expected to be significantly cut back and year 7 intake has gone from 6 forms of 20 to 4.

Schools face being marked down for taking on too many middle-class pupils under plans being considered by the education watchdog.

As part of Ofsted’s new rating system, schools would have to take their “fair share” of pupils from disadvantaged backgrounds as well as those with special education needs…

The government is a joke. Instead of trying to push more people into private to relieve the state sector of financial pressures since each kid in state cost taxpayers £8k essentially, they are now going to have even less spots for middle class families who cannot afford to pay VAT and now are being crowded out!

With you - it’s unbelievable how vicious Labour are.

We were told ours would go up by 13%

I think that's what the rich want - for their children to mix with the wealthy families only, no one from lower background.

Yeah, that must be it…

@WalkingDead99 well no, but equally if you are going to make me pay through the nose and then support others to get the same privilege through bursaries you can sod off. I ain’t paying £50k a year for each of my three children after the increase so that others can access the same access the same for free or at a massively reduced rate. Charge what you think we ‘owe’ with extra taxes even though we also don’t access the state education we pay for automatically. Just don’t expect us to have anyone else piggyback.

Huh? Schools aren't making choices about the demographic of their pupils though?
Or is the proposal going to stop popular leafy-suburb schools from having a catchment area/shortest distance criterion in their admission arrangements?

We haven’t been told what our fee increase is yet.

Remember it is not just VAT and business rates; it is also an extra £900 per staff member (approx amount for employees on media earnings) plus increases for staff on minimum wage (eg cleaners, catering, administrators etc). Those costs will also need to be recouped and VAT charged on top.

They have also emphasised that from next year onwards fees will rise at the usual pace😱

Not the usual rate - there will be VAT payable on any increase too.

10-15% is the norm round here (Home Counties). Ours is 11%.

Havent heard of anyone planning to leave at all, on the contrary we still have kids piling in from state especially with SEN.

Schools not clear on cost savings but both ours have historically done loads of community partnerships and high bursary provision etc. Suspect much of that will go, originally I was relatively sympathetic to idea of vat of fees and wouldn’t have wanted these to be compromised, but since we’ve all been labelled public enemy number 1 I couldn’t really care less if they make up the difference by cutting some of the community work.

Waiting for the invoice to see exactly how much but we had a letter in September saying they would pass on ‘no more than 15%’ and guaranteeing no further increase in fees until September 2026

You could give to other causes instead though. There are so many people in need both in this country and abroad.
Why don’t you tithe? That way if your income goes down, your giving does too.

@FloralGums what has whether or not I tithe have to do with it? Spending money on school fees has nothing to do with it