Removing charitable status for independent schools

[justanotherdaduser]

What do people here think of Labour policy of removing charitable status for private schools?

I am conflicted about it.

DD goes to a London independent and if in three years or so fees rise by 20%, it will not be easy for us.

But that's just our personal circumstances, and while I will be unhappy if fees go up by 20%, I can also see the point Labour is making -

that the school our DD goes to and hundreds of others like it are not really a charity. Most spend no more than 10% of their fee income on bursaries, if that. Vast majority of parents who send children there are comfortably above national average income. The charitable status is an anomaly and independent schools don't deserve tax breaks reserved for charities.

So was wondering how others feel about it.

(Applogies if this is not the right forum. I am mostly a lurker here and wasn't sure what's the best place to post this. Happy to move this somewhere more appropriate if required)

I don't understand why state schools have to cut their cloth accordingly, but independents feel entitled to be propped up.

They are NOT propped up, they are funded by parents!
Each independent l know offers full bursaries each year, many supported Scholarships and pairs with one or two state schools who benefit from all the facilities and educational support.
If that is not charitable l don't know what is....

Yes it’s a bad policy that plays well but that’s all. We’re heading away from previous Labour government positivity and optimism for all to a more divided society that leans on envy. But we’ll all be poorer for it over time as the top centiles take the tax burden. Blair knew he needed them for a reason.

I don't understand why state schools have to cut their cloth accordingly, but independents feel entitled to be propped up.

Private users still pay tax for something they are opting out of. It’s the other way around.

It’s their choice so I don’t agree with tax rebate for any private use including health but they pay and leave a space.

In some respects, this will make no difference to the them and us , ie state vs private. The rich will still afford private. It’s the ones who scrape the fees together who will be forced out. Professionals have increasingly found it expensive to use private schools for more than one Dc. They will send Dc to state schools in increasing numbers. So there will be a greater divide between state and private. Private will become more elite. Strange way to improve education. If the elite schools are not here, very rich parents will use ones abroad.

In addition to having a clear ethical motive, removing the tax break / charging VAT would be well timed. The biggest risk that state schools face today is falling roll numbers (due to population trends and net migration away from urban areas) due to issues with reducing numbers of form entries (in my area the first state primary in living memory has been forced to close and we're expecting others to follow sadly).

I would question how 'charitable' bursaries are - if they are only available to pupils who are high achievers, then I would consider it part of the marketing budget...

www.crowe.com/uk/insights/vat-school-fees

I bet the truly rich private school parent is just going to prepay before the VAT comes in. The rich top schools will have money pouring in which with current interest rates will go up…

The rich are always fine. The very rich schools will be fine too.

The parent struggling and the small schools will suffer.

Oh not this tired old argument "why don't state schools just improve".

State schools ARE much improved by every objective measure. And some that are less objective - has anyone noticed how articulate and thoughtful our footballers at the World Cup are? The fact that they're speaking out on wider issues than football? That's due to improved education!

And state schools don't have the luxury of excluding the non-middle class kids, the ones in poverty, the ones from hugely disruptive backgrounds! You think they wouldn't "improve" if they didn't have to bother trying to help these kids?

I don't even have strong views about this policy - I suspect it won't achieve all that much. But some of the absurd and offensive stuff coming out on social media from people whose idea of state education seems to owe more to Grange Hill than reality is rapidly convincing me that Labour should just abolish private education altogether!

ifs.org.uk/articles/growing-gap-between-state-school-and-private-school-spending

Private schools have been massively overspending and state schools have been underfunded. Both sides our wrong!
Our state schools which the DC attend are the meanest leanest machines they could possibly be - their results are better than the local 22k per year secondary school. However, teachers have to work too hard, in my opinion these days at our schools. Too much stress for them. Stressed adult is not great for kids either.
Our Borough has the second lowest funding in the whole country per pupil (under 2k!) and the lowest in London. Yet it produces great academic results.

I am all for Labour removing charitable status etc - but really what they actually need to do is regulate private schools much more so that the kids their have greater protection too. Eg the managing out aspect, no appeals etc. Whether a child is in a state or private school - state still has the duty to protect it.
If some private school pupils do end up having to switch in vast numbers then frankly that is just not fair on those kids, especially post Covid. I do not think anything harming kids is OK at the moment.

I have sympathy with this. We use both and state is very good. What I don’t need is increased competition to use it, which Labour’s policy will do.

500,000 children are at fee paying schools so if all thosem oved to the state sector it could be quite expensive. May be groups of private school parents could club together to found new state schools with state funding but no longer have to pay fees, a bit like the move to academy status for some and also the 1970s move of "direct grant schools" fully into the private sector.

If 20% VAT goes on school fees may be that will need to be added to anything paid for in state schools such as contributions by parents to the school which are often sought? Woudl 20% then have to go on the fees teenagers pay to universities or to Saturday Polish or Hindu school many go to at weekends or stage school? Where do you draw the line?

@MarshaBradyo - well if you are close to your sought after state comp you will benefit personally in terms of property prices. Might even cancel out your VAT. Might be able to remortgage and pay the fees upfront on your anticipated increased house price…
Perhaps it is all another big ruse to keep property prices artificially high on average if there is a big impact because those catchments will indeed become even more expensive.

My objection is based on using state. I doubt we’ll be using private by the time it comes in as that dc will be older. But our state is already oversubscribed and this will make it worse.

i agree with you last line though - like an outstanding ofsted it benefits house prices and estate agents

Agree with your second paragraph. You can’t just say “add VAT to private school fees” but then leave nursery fees, pre-school fees, music lessons, university fees, tuition, out of school clubs etc exempt from VAT. Where would the line be drawn? Would they say that music lessons/out of school clubs are only subject to VAT if they take place in private schools for example? I can’t even see how that could be effectively implemented through legislation.

It’s not. I was a teenage parent brought up on a council estate and on benefits. All my children have been privately educated thanks to bursaries.

Clearly labour know that they are going to get support for this otherwise they wouldn’t be shouting it so loud. Polling must have been done and public opinion for this must be high. Long term I suspect even Tories will be adding VAT from the whispers I here.

Hear

@Another76543 @Xenia so should 6th form colleges stop paying rates?

Yeah, dratted democracy, eh?

@MarshaBradyo what about falling birth rate? Plenty of room in your state in the future

Am I meant to be seeing this already in reception? I’m not it’s still oversubscribed so it won’t change as they go up the years

I don't understand the comparison with 6th forms that has been made a number of times on this thread. State 6th forms don't charge so there is nothing for them to add VAT to.

Independent schools currently pay input VAT. State schools are able to reclaim it under the VAT Act 1994. The problem for 6th forms is that they didn't fit into those reclaim provisions so have been in the same position as independent schools.

I think there might be quite a bit of confusion in this thread between paying VAT and being required to add it to services.

Much more important to me is that Labour starts funding our local state schools better than the Tories have. So if this is some ruse/distraction to appeal to the masses instead of funding our state schools and SEN kids, in particular, properly that I am going to be really disappointed.

Post Covid we need a huge boost in the funding of education. I am not interested in successive governments not training and educating their own population properly but relying on stealing e.g doctors from poor African countries. Because we are too stingy to fund our own med places and pay our own NHS staff more.

www.gov.uk/guidance/vat-on-education-and-vocational-training-notice-70130#section3

Current VAT notice linked above. It can just be redrafted to stop independent schools being eligible bodies and keep universities exempt. Whatever Labour would get through Parliament.

I think it is all in the drafting and if they get a majority they can do what they want.

Most of the pupils in private schools are from hard-working middle-class families. They paid much of the tax to this country. Sending kids to private schools means giving up spaces or the education investment from the government. Do you really support squeezing these kids back into the state system?