Tax on school fees

[CheekyUser]

of course it won’t affect the really wealthy but we have three kids at private school and we are now going to withdraw them all. We will see them through the remainder of this school year and from September we have secured places at local state schools. When the alternative is free why would we carry on drawing down on our mortgage and sacrificing holidays and be taxed for doing so. Let the state pay.

Sounds a sensible decision OP.

My boss kindly 'managed me out' of my job in August. Despite having a fully remote contract he tried to insist I go into the city office full time. I declined. My settlement agreement will pay my ds's VAT.

There's always an up side 🤗

It sounds like you couldn't afford the fees in the first place. Mine are staying in PS, if you can actually afford the fees the tax is fine.

Sounds like a great decision, OP.
It's good you've been able to secure the sixth form places so early, that's results based round here so we are not totally sure til next August, GCSEs in hand.
As others have said, why not leave the younger one in private ed until after GCSEs? Or are you not seeing benefits that make it worth keeping them there?

That's lovely.

Unfortunately, our local secondary school got only 41% of boys through GCSE maths. Ofsted said it was it unsafe, bullying was rife, the staff had no idea who was on site and the younger pupils were at risk from the older ones.

Then they fired the head, and the governors, and a year later, wound up the trust completely.

So while you may have access to a wonderful state school, some of us do not.

DS has a scholarship, and I pay half fees as a single mum. Thankfully ds only has 5 terms to go and I'll use a recent redundancy payment to cover the VAT. We will get through.

I cannot fathom why pp’s get so worked up over other people’s education choices.
Private education, homeschooling- those who oppose it seem happy to allow the state to dictate their family choices.
If you live in a capitalist society then those with money will use it to advantage their dc.
Anyone who says they wouldn’t has never had the money.

@CheekyUser do what suits your family.

If you’ve got a good 6th form college why would you not use it? My ds will go to state 6th form, nothing to do with VAT, the secondary locally didn’t suit him, we’re lucky enough to be able to go to private instead, but only until year 11 as there’s a fantastic state option at that point.

and don’t think that going private is doing the state a favour, schools are funded per pupil, state schools very much want to be at capacity and we have a falling birth rate.

If state is falling why is the no “incentive” to reduce homeschooling?

It might not be doing the school a favour, since the funding formula is per-student.

But it's certainly doing the state a favour. There are 8.8 million school students, but the state only has to pay for 8.1 million to be educated (the children's own parents pay for the rest.) The state per-student education budget is £7460.

Since 8.1 million x £7460 (Current student numbers) is lower than 8.8million x £7460 (if all kids were in state schools), this means the state pays less than it would if we didn't educate our children ourselves.

And since all state funding comes from taxes, and whatever comes in is shared out between all state expenses - such as education NHS, welfare, pensions - then reducing stare education spending is doing every UK citizen a favour.

I find it really weird that some people don't understand that. It's obvious, surely?

Now here's the really good bit. The per-student education funding formula is set by the government. The government can choose to change it.

The UK spends £116 billion on those 8.1 million kids currently. If school numbers fall by 4.5% in the next 5 years as expected, the government could:

a) Increase the per-pupil funding so that the £116 billion is shared between the remaining 7.7 billion students. The teaching ratio would then change 1 teacher to 17.2 kids to 1 teacher to 16.4 kids

b) Encourage half the kids to move from private to state so that the education budget remains the same £116 billion, and still with the current higher teaching ratio. Oh, there will be an extra 1/3 of a teacher per school in the most optimistic case...doesn't really change the teacher ratio.

Which is better for the state kids (for the same overall education budget): a teacher ratio of 17.2 (with VAT) or a teacher ratio of 16.4 (by doing nothing)?

It's not hard to see which is better. But somehow, it's still beyond Labour's maths ability.

@strawberrybubblegum isn't it more likely that the current budget of
8.1 million x £7460 would instead be divided by 8.8 million making the per-pupil funding £6867 instead? Of course it's not the case that all 700,000 will actually move to state but I very much doubt that the per pupil finding will still be as high as £7460 per pupil (inflation adjusted) in 2025-26.

You are right that it's not about saving money though.

It's been shown in research that if you split boys and girls for education the girls do a bit better than they would if combined and the boys do a bit worse, but overall the average attainment is better in co-ed so policy promotes co-ed over single sex as far as possible, though single sex remains legal in some cases it is discouraged.

It's been shown in research that if you split higher and lower academic ability for education the higher ability (grammar) do a bit better than they would if combined and the lower ability (secondary modern) do a bit worse, but overall the average attainment is better in comprehensive so policy promotes comps over grammar as far as possible, though grammar remains legal in some cases it is discouraged.

In exactly the same way if you split higher wealth for education the weathier will do a bit better than they would if combined and the less wealthy will do a bit worse, but overall the average attainment is better if all children are in the same system. The individual wealthier pupils who might otherwise have been privately educated will do worse than they would have if educated separately but the overall average attainment across the whole population will increase. It is government's job to set policy to do the greatest good for the greatest number. They aren't making private education illegal, they are just making it a less easy option because the principle of egalitarianism, and the discouragement of elites, is more beneficial to the wider population than the financial consequences

I am not sure why so many think that switching to a good state sixth form is straight forward or like an easy choice. Many outstanding sixth form colleges are selective grammar school themselves and have limited spaces for outside applicants.

Why have you announced it , nobody cares apart from you / your kids .

private schools have pushed up prices and this tax is another massive increase. It is now unaffordable for us. School fees take up every penny we earn and we live off borrowed money

There's your problem then, the mean nasty private schools should drop their prices, but if you were living on borrowed money anyway it would have been unsustainable anyway?

Oh dear OP. That backfired a bit didn't it?

Your 2 eldest were going to 6th Form anyway and you've already said that you couldn't afford the school fees anyway.

If it really was down to the addition of vat, you would have more than enough to keep your youngest in private until they also reach the natural break at year 12.

Thanks for letting us know your plans op, I'll sleep easier tonight 👍🏼

Are they? Would not that be referred to as a grammar 6th form?

When I hear 6th form college I think of a standalone college such as we have in Hants (where next to zero state schools have their own 6th forms).

I haven't seen any communication from the government that they accept that the tax will cost the UK financially, but that they are choosing to implement it anyway because they believe it will increase overall attainment.

Possibly because admitting that would increase the chance of a human rights challenge being successful. It goes against EHRC for a government to deliberately restrict education (ie make less accessible - not as a side effect, but as the main goal).

Or possibly because they would then be asked for proper analysis.

How much will it cost the UK? (All costs: not only the direct loss of indy parents subsidising the state, but also reduced workforce participation, loss of private school employment, lost educational attainment etc).

How much will it benefit the UK? What numerical evidence do you have of that benefit - not just airily hand-wafting that 'it's fairer'.

There have been studies for splitting/combining by sex and ability. What evidence do you have that this would also work by school sector choice? And specifically, how much would it improve it? The loss of such huge parental financial subsidy into the public good of educating UK children gives a completely different dimension than the school structure choices you mentioned.

I don't believe any of that that analysis has been done. Why would they hide it? They might hide the cost to pretend this tax was intended to make money - the Adam report is a good start for that - but why hide any genuine analysis of the benefit?

Can you imagine that happening in business? A change to the company which would destroy a successful part, without any numerical analysis or evidence? Just a qualitative 'it'll be better'. It's something a work placement student might do. They'd immediately be sent off to do some more analysis with an eye roll by their manager.

So you're saying that this is all OK because Labour are just lying to us all about their reasons for this tax. I think you're probably right that they're lying, but they're also incompetent.

What you're suggesting is just such a nonsense aim anyway.

Can you imagine if the government added a 20% tax on food: not because it was going to actually raise any money, but so that more medium-income people had the same food security worries as low-income people. In the hope that this would improve food banks.

That's what you're suggesting for education.

What has happened over the last few years is that private schools have pushed up prices and this tax is another massive increase.

Prices have risen massively pre VAT and will continue to eg to covert the cost of pensions unless schools opt out of TPS.

I am fortunate to have been able to but my DD through good state schools. She's in Y13 now. She got very good GCSEs including two 9s. She's predicted A*-B for A Level. The teaching has been good despite learning through a pandemic. The only thing within their control they could be better at is admin and organisation.

My child doesn't have SEN, as a disclaimer.

We live in an area with a few private and selective schools and I am very glad we couldn't afford to go to the Private ones! I have achieved exactly what I set out to do, which is allow DD to do her best, and really, that's my only request.

I think there may be a slight influx of children from the private sector into State but that happens every time the economy combusts or thr Government make such a decision as taxing fees...I don't think there will be an exodus. I also hope that parents will be surprised by state education. It's not all Grange Hill now. State schools where I am have improved immensely over the past 20 years. Of course there are still some to give a wide berth, but mostly, they are very good.

It would be a better analogy if the government was proposing putting a 40% tax on restaurant meals in order to fund a programme to eliminate the need for food banks. Such a proposal would kill enormous numbers of small restaurants that barely make a margin as it is, so would probably cost the country a lot in lost employment, yet the wealthy would still go to restaurants anf grumble at the tax and there'd be a swathe of the population who used to be able to afford to eat out but now can't, and it would have only a positive effect for those who couldn't afford to eat out anyway. I am not advocating for such a policy and as I said I am not a fan of the school fees tax either, I just think I understand why they are doing it. I think they know full well it won't make much money but they are doing it anyway on principles of egalitarianism and discouraging elitism.

We need the food bank part of the analogy because what makes this policy really, really stupid is that it actually reduces outcomes for everyone.

The richer people who have their quality of life (what they can buy) deliberately reduced.

And also the poorer people who have to share a limited resource between more people.

And the idea that through some kind of socialist magic, having more people splitting that limited resource between them will make the provision of the limited resource better

I agree that they're doing it on principles of egalitarianism and discouraging elitism.

But they've done no analysis. They are so certain of their moral superiority, that they see no need to figure out what will actually happen, and think about whether it really will make people's lives better.

That's what I'm so pissed off about. The sheer stupidity. Hand-waving, moral superiority instead of actual, real outcomes.

What I think would be a reasonable compromise would be to keep the tax but make the first £7460 per child deductible against uk income tax. Ideally if possible with an exclusion clause that removed the deduction if the income was purely from investments/property rents so that those who are so wealthy they don't need to work still paid full tax, and the russian and chinese oligarchs sending their children to boarding school here still paid in full, but the rest would only be paying tax on the "luxury" aspect - the amount of fees that is going to making the education experience for the wealthy a better and more enjoyable experience, but no tax on the £7460 that's the cost of a basic education without the frills and gyms and swimming pools. Labour wouldn't do this as it wouldn't be sufficiently egalitarian but a future government might.

Hmmm. It sounds like your two eldest are getting the best of both worlds and you're trying to be canny. Private through GCSEs, and state sixth form - presumably a very good one - in the hope it might help with university admissions.

The younger one puzzles
Me though. If you've afforded fees for three all these years, who not pay for that child to go private to GCSE, just like the eldest? It's not just VAT that's forcing this decision is it OP? It doesn't make sense. Something else going on financially in your life and you're trying to save face by blaming VAT?

Your post just doesn't add up.