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 think it is heartwarming to hear people saying they will stop working so hard - more time with their children, more time to take them to do extra curricular outside of school. It sounds like their future will be lovely.

@Smurfma
The Dc might not like their journey to their new state school though if a transfer outside y7 standard time. . No places at most good schools. Only poor ones no one else wants. They might not like the schools much either. More time with mum might not be the best thing ever. Rosy coloured specs I think!

Preps are different outside London. Different again outside the SE. So that’s where the difficulty will be. So many good state schools are full. Dc will go to less desirable ones. Still, people not working for fees can become governors and pull these schools up! What’s not to like?!

@TizerorFizz agree what not to like about pulling up (certain not all) state schools so our children don’t feel they need to privately educate our grandchildren - greatest gift we could give them.

I'm as poor as a church mouse and could never afford private education for my children but disagree with this proposed policy - it's punishment for the middle classes who pay twice (in taxes and fees), the very richest won't be affected. It will rob many families of a legitimate choice.

This is wrong.

The average fee charged by independent schools is £5200 per term. VAT on that is £1040 = over £3000 per year. Some schools may be able to absorb some of this, but most will have to keep their fees the same, resulting in a significant increase in costs for parents. There will be many parents that cannot afford this.

Putting VAT on school fees will not raise anything like as much as Labour claim and may actually cost the government money overall. Their figure ignores the fact that, if VAT is levied on fees, schools will be able to reclaim VAT they pay on supplies, which is currently non-reclaimable. It also assumes that the number of children attending independent schools in the UK would remain the same, which is highly unlikely to be true. If one third of the children currently attending independent schools move to state schools, this policy would actually cost the government money. Indeed, given that the state system doesn't have enough spare places to absorb those children, it may need a significantly smaller number to move.

If Labour want to tax independent schools out of existence, they should be honest about it. If Labour want to punish people for sending their children to independent schools, they should be honest about it. But then, expecting any party to be honest about its policies appears to be too much to expect.

“out of existence”, “punish” are emotive terms. To me it sounds like closing a loophole and making some money.

I can understand and even support this policy from the philosophical point of view - that private schools are businesses and should be taxed as such. But I doubt if it will bring the desired results in terms of social equality or tax revenues. Parents who can no longer afford the fee rise are still relatively well resourced. They will be able to take advantage of the state system (postcode, grammar, tutoring, etc) or give privileges to their children in some other ways (like a house deposit). The benefits from their participation in the state sector will likely be limited to the already affluent areas. But sure, bring it on.

Lettherebedelight, some of us paid school fees to ensure the opposite - to try to ensure that at least one or two teachers voted Tory rather than 100% of one view point you sometimes see in schools.

On the VAT issue as that seems to be too hard due to having to apply it to university fees, nursery fees, special needs schools etc one option is a kind of windfall tax the school pays on their turnover from fees paid by parents so it is not really VAT at all. However, it may lead to discrimination claims and judicial review perhaps. We shall see.

vat and charitable status are two separate issues. Schools could be allowed to retain their charitable status and have vat levied on fees or vice versa. Schools not charging vat is nothing to do with their charitable status, schools that are run for a profit and are not charities do not have to charge vat either. Charitable status means they do not pay corporation tax on their surplus and I think there may be rates advantages too, this is the extra cost the poster was referring to so they are not wrong.

you are referring to charging of vat on education. Anyone providing education would then need to charge vat, people need to be careful what they wish for

They may be separate issues but Labour are treating them as the same. They intend to take away the current VAT exemption. It is easy enough to remove the exemption for independent primary and secondary schools without it affecting other educational services.

Would VAT be payable by international parents who send their children to UK to board? A reasonably high proportion of the parents paying the super high fees in the top boarding schools are from places like China. I am not sure how they would be treated under this policy.

@Xenia I didn't mention what political party the teachers voted for. If extreme right wing and misogynistic views are how you view Tory voters and that's what you were paying for that, so be it.

DS is now at Oxbridge with friends from all backgrounds. The state school he moved to was the perfect fit for him (and us). The teaching was outstanding across the board.

Of course that status should be removed.

They are not charities...

Yes, international parents would have to pay.

...but they are...

Is that because the location for VAT purposes would depend on the place where the education takes place rather than being a supply to the location of the parents who have signed the contract? I wonder whether that would also apply to all the other non-educational services that are also bound up in boarding fees.
I am nowhere near being personally affected but just interested as presumably the impact on foreign parents would be very important for some of the most expensive schools as there are some with a very high concentration of children form particular regions.

DD went to an independent. I suppose if they lost their charitable status, they'd could also stop the the following charitable activities in order to save money and avoid upping fees too much.

• Allowing a local state school to have swimming lessons in their pool 3 times a week
• Phase out full bursaries because they'd no longer be required to provide them
• Stop allowing local drama group to use their theatre area and facilitates for rehearsals and annual productions
• Stop running staffed play group 3 times a week for families on low incomes
• Stop the free disabled swimming sessions they run in conjunction with a local charity on Saturday mornings
• Stop the free lectures they run for the community - usually delivered by people they pay to come in and often attended by local community groups especially for the elderly.
• Stop allowing 2 local state schools to use their mini buses (and drivers) for trips
• Stop running evening martial arts and creative arts sessions for a local youth group who are working to distract children from gangs.

Presumably, no one would miss any of these things but if private schools are forced to become businesses all these things are likely to disappear and more - the above is just what one school was doing - and comparative to many independents not an expensive one.

Charities are businesses. They trade, eg Oxfam. It’s not about being a business or a charity, it’s about VAT being levied on their services, or not, as at present. The difference is that those buying the services may not be able to afford the tax and therefore not the services.

Yes. Schools would be providing services in the UK, so VAT would be chargeable under current rules. The government could, of course, choose to change the rules.

Lettherebedelight, I know you didn't but I am sick to death of teachers not voting Tory (not extreme right, but Tory, normal middle of the road British politics). Most of them seem to be woke left and then pass on that view point rather than conservative views to pupils. I wish we could recruit 50% of teachers who vote Tory and 50% Labour for balance and true diversity of thought.

On the trading point charities have to set up trading limited companies separate from the charity I believe - it is quite a complicated set of laws.

Can you explain what woke left means and what Tory middle of the Road British is?

Are we talking Green Tory? Or Sink the migrant boats loony Tory? Tax cuts for the rich and collapse the pound Tory? because right now I haven’t got a fucking clue what a Tory is.

The term woke was coined by black people to assign an awareness to civil rights , it came about in the early rise civil rights period, pre Second World War . Since then it’s been corrupted as a catch all for anything that threatens white male power , is that what you mean? You want your kids to be taught by vetted teachers who are right wing and and believe in white male supremacy?

Don’t hide behind meaningless buzzwords , say what you mean, be brave .

Tory means those people who have voted in the Conservative party. Labour has not won an election since 2005.
Woke left is distinguished from liberal left. Liberal left allows for different ideas all being right and freedom. Woke left is a one right path kind of left wing view with little tolerance for other views and is part of cancel culture.

Given how few people are prepared to vote Labour in the UK it is a pity most schools seems to have teachers who do not vote Tory. That is all I was saying.

@Xenia I think you will be very disappointed at the next election. Although extreme right wing and misogynistic views will still be alive and kicking at Public schools and what will then be the opposition benches.

Through my work, I was shocked to discover that the independent schools in my area aren't as glossy as they appear. I found myself knowing that my friend was paying for a school that would have lost its funding had it been in the state sector. So actually I am all for the schools having to work harder and more efficiently. Removal of charitable status may just force that...I hope.

www.spectator.co.uk/article/of-course-rishi-sunak-doesn-t-have-any-working-class-friends/

The video here is quite something, what a jerk !