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)

Exactly. If it's just about raising tax, put a percentage point in the top earners.

The country is broke, we need to do that and close all the tax loopholes. It's not either/or.

Why would they need to go anywhere? The facilities will still exist. Schools will charge VAT on fees which will be passed to HMRC. No change to school revenues and no reason to stop other groups using their facilities.

Isn't this why they also get charity status? it is not all about bursaries. My school has a number of organisations that use its facilities at night and at the weekend. If they no longer have charity status, they may no longer be obliged to provide these facilities free or subsidised. Other people using the facilities add to the cost of running and the wear and tear.

My DC will have finished by the time this got through parliament, but I predict that it won't bring the returns people think. For starters, it won't raise the amount Labour think, because people will remove their DC from the schools and put them in the state. Making me pay 20% VAT would cost me around £3,600 a year, but if I pulled my DC out, would cost the taxpayer £5145 per year.

People seem to think all private school children go to Eton or Harrow and the parents will pay whatever. These are just a small % of children. The rest are like mine, in a private school costing £14-18K a year and scraping together the fees to do so.

Also, moving them to state wouldn't stop me from focusing on their education. I would get a tutor for my DC, pay for extracurricular activities and move to be near the school.

As mentioned, this won't affect me. However, to think that all of a sudden your DC will be in a class of 25, with ex-private kicking off for better standards, and more investment from schools from this pot of gold, is very naive. For every child that leaves a private school, the government will have to pay nearly double what they would have got in VAT from that family. It's a false economy.

This

That's a really good article, thanks. I think it's fair enough on balance as education costing three times what it does in the state sector is not an essential (hence VAT should apply) and nor is it within the spirit of charitable activities.

I do worry what else might get caught up with the VAT though - eg kids sports classes or music lessons, as they are essentially a part time privately paid for educational activity. Or holiday clubs.

Private schools do pay VAT , if they are not charities (and there are many which are not)

The value of the tax break arising from charitable status is £200 per pupil per term (source: The Guardian).

VAT on fees is a totally separate issue

I love the MN attitude- pro labour, pro taxes- oh wait unless it affects me.
most people will stretch to the extra costs-
just like they cope with raised fees, extra curricular costs, school trips etc. and if you can’t that’s because you can’t afford it. There’s a cut off for most purchases - I can’t buy a Lamborghini, I don’t demand a vat reduction.

No way should private schools have charitable status. It's ridiculous

One of my parents work for an independent school. It doesn't make huge profits. Several of the school buildings are grade 1 listed. Massive maintenance costs of them. They also own and maintain the village church.
A lot of the kids there are children of military or other overseas workers who need their children to board. Most of them wouldn't be able to afford the fees if they increase by 20%. Without a doubt the school would close.

Out of interest, for those in favour of adding VAT to independent school fees, would you also be in favour of adding VAT to university tuition fees? Where should we draw the line? Should we add VAT on private health care premiums as well? What about private nurseries? Perhaps VAT on school fees would just be the start of a Labour government raising additional funds.

Yes

Instead of removing the charitable status, they could be more stringent about ensuring that private schools contribute more to the community so as to merit their charitable status.

Unfortunately this is just not going to work and there will be unintended consequences which will cost the state far more. It is just a cheap vote winner. I agree independent schools are not really “charities” though.

Most of the top and richer independent schools are run in a fat way - if they wanted to keep their squeezed middle class parents they can easily make some cuts e.g. less sports buses/sports on offer, don’t really need a 8:1 staff to pupil ratio, don’t really need to keep fundraising to build swanky new buildings constantly which actually create jobs locally. These schools spend so much on extra curricular and because of the charity status they plough it all back into the school - which they won’t need to if the status goes.
You see the governors of these schools tend to be really sharp people who will see the exact way out quite quickly. In a way, not being charitable is probably what some of them want anyway! And that is the crux of the matter. Parents of independent school kids do not need to fear. There will have to be some changes, but they won’t be drastic.
So your local pool heated on the weekend for our swimming lessons and netball will either go or be charged exorbitant rent - the parent group will vote on their feet. If they are paying all the fees and upkeep and there is no longer a need to share with the local community, why would they? Especially if prima facie the government has turned on them.
The whole top school thing will become even more elitist and international.
The small little schools will close. Some teachers will have to re-enter state education - but likely most will pursue other jobs. Whilst the independent sector can also be stressful, it is in many cases a much more pleasant working environment.

It is a red herring and whilst conceptually it is a vote winner and seems to make sense, in practice it just will not. Like many of these things…

And where is the state sector suddenly going to find sufficient spaces for all these kids?
You can't magic up schools overnight! Nor the staff to staff them!

Private nurseries enable parents to work- if there were free child hours, state run nurseries from birth you may have a point, but there aren’t.

university fees- i think vat is the least of the issues around uni fees.

They’ll have to make space for children who’s parents cat afford to pay a fair amount for their private schooling rather than subsidising rich parents choices

@BlusteryLake - that is actually already happening at the schools that can afford to do so because they have the cash. From an endowment or from fund raising from rich alumni/current parents. There has been a big trend to up bursaries in the last few years and really benefit the local community - from the schools that have the ability to do so.
It is the schools that are barely surviving that will suffer and those kids will have to re-enter the state system or find another provision.
Anything that harms some kids is never going to be a good thing.

would you also be in favour of adding VAT to university tuition fees? Where should we draw the line?

On any sector the government doesn't want to subsidise as a public good.

Personally I'd tax private healthcare and stop taxing state schools.

How many parents do you think can’t afford the rise that the state school system is going to be flooded.
instead of charging parents the schools can make cuts to services- might bring it home to some on here!

Some confusion here. State schools don't pay vat on anything educational, not sure about other things. Assume independent schools are the same, as well as the issue of adding vat to fees should private schools pay tax on textbooks, pens etc?

Of course they should lose charitable status.

The most sensible reply to this ongoing question. Thank you!

I don't think it's a bad thing inherently to charge vat on school fees. In my experience the majority of people could suck it up. They'll still be more privileged and annoying most of Mumsnet. The trust fund/granny/business dividend will just jack up in the school fee years. This who can't afford it will start in Y9 not 7 and tutor heavily before hand. Or have two not 3 kids (a surprising number of people at our local school have 3 kids - 25k a year a senior level). Instead of state till 8 it'll be state till 11.

Some smaller more vulnerable might close.

It's not right or fair that private schools exist. But it's human nature to want the best for your child whether that be reading to it every night and buying it book, supplementing with tutoring, moving to a catchment area, discovering an interest in Christianity in year 5.

Instead of taking away the right of choice for people why are we not focussing on raising the game of all Ed establishments to the levels od private school

Ones near us allow that because by doing so they were able to access various grants meant for providing community facilities, they don't do it out of the goodness of their hearts!

For all of those saying private schools cream of the clever kids and provide burseries. My autistic son who has a learning difficulty was given an 80% bursery at an independent school. He also cost the school a lot in learning support (which I was never charged for) the teachers worked endlessly with him to get him through his exams.

My daughter is dyslexic, she was given a 80% bursery at a different independent school. They identified the issue and helped her so much. She got all A*/A in her GCSE.

Being given a bursery changed my kids life’s. They or I were never made to feel any different from the paying kids/parents.