Any other Heads publicly worrying about VAT?

[JustanotherBerkshiremum]

DCs at an independent school. The Head is obsessed by the proposed VAT implementation. Since October he has raised this issue in all public correspondence, ie newsletters, the school magazine and the end of term letter.

Are any other Heads out there publicly worrying about the future to their parents or is it just ours? You don’t need to name the school.

I get that it’s an issue but the school can finally claim back VAT. And if they get decent tax advice then they can cushion it a bit more. And it will only happen after the next election if (because nothing set in stone) Labour get in which is two years away.

I’d rather the Head kept his thoughts to himself at the moment. Am I being too harsh?

Does anyone know if academy trusts, which are private and not state owned, will be required to charge VAT and pay business rates? Are they legally independent schools that sell their services to the state and not students? My guess is that the state will exempt itself from VAT but business rates might be different

I think government funding is not a business transaction so is outside the scope of vat.

My best guess is the academies would stop getting business rates relief but would be able to claim it back from the funding agency, which they do for the bit of business rates they pay.

While we are discussing the costs that schools face, I think perhaps it is important to consider the 69% increase in employer pension contributions that schools where teachers are in the Teachers pension have had imposed in the last 13 years.
Teachers pensions are unfunded, they are paid out of general taxation, and the employer and employee contributions go into general taxation.
For state schools that means that the government gives them money, then they have to pay more of it back in employer pension contributions, effectively reducing school budgets as the increases in contributions have been unfunded.
For those private schools in the teachers pension scheme the current government has already imposed a greater increase in costs than the 20% on VAT.

Which party is it that wants to do away with education?

But labour aren’t planning on reversing that though are they? So they have that in place and then the extra VAT on top

My point being that parents of private school students didn't complain when the current government imposed a huge cost on private schools, but seem to be up in arms that the Labour party might impose a smaller cost on private schools.

It’s cumulative though isn’t it. The straw that breaks the camels back.

and I actually think that private schools should fund the pensions of those that work in them. Happy to accept that increase. Just can’t manage this one on top of that

Tory government increase good, Labour governmen increase bad. Understood.

No, you are deliberately misrepresenting what I said.
pensions are a cost of running a school. Should be paid for by the school. Just about managed to cope with fee increase.
high inflation and interest rates.
additional tax imposed - can’t manage to pay this as well.
so will have to make the choice to cost the state money by moving to state rather than not costing them money.

So the Tories imposed a 69% rise in pension costs on schools and that is fine, pensions should be paid for by employers and a number of schools went bust as a result. We wont get into how that cost was unfunded for state schools. Labour propse a 20% cost and that is a disaster and mighty unfair, and yes some struggling schools will go bust. But most state schools are functionally bust already.

No, I am saying that the additional 20% is the tipping point that makes it unaffordable if you’re paying individually rather than by taxation for education.

I am not the one picking a fight here. It’s quite clear that the cumulative effect of two rises are more than one rise, in a different economic environment.

Is it a tipping point? Another poster said that fees have risen by 15% in two years and yet so have rolls, In the meantime the Tories continue to defund state education.
Remember Sunak is proud of his record of replacing every state school building once in 400 years.

Yes because the fees have already risen.

this is an additional tax charge on already higher fees.

i can only speak for myself. This is a tipping point which means that combined with normal rises (to pay for increased costs such as salaries and bills), we can no longer afford this until 18 and will be opting for state at the appropriate time.

We’ll therefore be adding to the state’s education bill by this action.

There is a lot of whingeing from people who basically, as a ‘class’, wanted massive fees, but feel an extra 15% will break the proverbial camel’ back.

You have to ask why private school fees have massively exceeded inflation for the last 30 years plus and, on the whole, now exclude all but the wealthy. Clue: it is not teachers’ salaries that have underperformed inflation.

It has been a massive arms race for world class facilities, a massive SLT, marketing department, counsellors on site etc etc, very little of it benefiting actual education.

And, this is clearly led by parents’ demands, otherwise it wouldn’t happen. Most parents love all the flashy add ons.

I could write endlessly about this, knowing the sector so well, but it is amazing that fees have gone up inflation+3% for years and years, with nary a whisper from parents, but a one off increase due to VAT is considered shocking.

With respect to the OP, I would be worried the school may already be trouble financially and would look for publicly available information about their accounts, pupil numbers etc. Don’t think the head is doing the school any favours!

Private schools will have problems of people who might otherwise have paid deciding not to; and current pupils leaving.

popular state schools: additional demand for places.

families of fee paying pupils: higher costs vs disruption of education/friendships for DC, especially if moving in years other than 7 or 12.

families applying for state school: less chance of a place at popular schools.

An unknown proportion of fee paying pupils will presumably leave their current school at key points: year 7 and 12 entry to state school. Then a smaller proportion for other years - since for those pupils there will probably be limited alternative choices of school so families of pupils, especially secondary, could aim to stay private until end of year 6 or 11.

quite interesting from a maths / economic perspective, but v stressful for people affected.

Yep, well my mortgage hadn’t gone up as much whilst those increases were going on, so we tightened our belts each time. Now it has and that with the general increase in the cost of living mean I will have to make different choices. Not a whinge. Just saying the policy will have that impact.

and when I said I would now be opting for state at a natural entry point I got attacked by posters saying that was unfair. Despite it being the other option open to me given that I can no longer afford the current option. Not sure where they expect my children to go in those circs.

as for counsellers in school - isn’t that what labour are planning on providing in state schools with this additional funding?

Just adding to the mass of parents vying for a great state secondary school place for my youngest. Was going to send him to independent school like his brother. But won’t be doing that with 20% fee hike. It’s a step too far. His brother is finishing next year anyway.

Luckily I live very near the state school and will have no problem getting a place. I’ll push out someone who can’t afford to live as near ( live in a very pricy market town).

well done, Labour

At least I’ll pay off my mortgage faster. And have plenty for individual tuition for my child.

It has been mentioned to us. I understand the worry. Our school does not have massive banks of cash. It is not owned by rich people profiteering, as it is a not for profit endeavour.

Most parents are not super wealthy. There are a few who are relatively wealthy, but most are not dissimilar to us, stretching themselves and doing without other things to pay fees.

I see why they would worry. It would price us out, and a lot of others that I have been speaking to. It will kill the junior school, but maybe senior school would survive, but smaller. There is no good state school close.

People outwith the school are concerned. The school makes the village attractive. It pushes up property prices. What will happen when lots of people like us move close to good state schools. What happens to all the people employed there? Our school is rural and the biggest local employer by far, in a county with a lot of economic deprivation.

It is not just about vat, there will be a bug ripple effect. They had better be confident of their costings.

As upsetting as it is to me, I will have to vote tory for the first time ever. I also cannot vote for a party who will harm my children so seriously.

it seems to me that a lot on here have no idea of what a state school is or how it works. They vary a lot, and many are doing well with very limited funds.

I was also threatened with having to go to a state school if my parents finances got worse. I was terrified. Luckily my full academic scholarship kicked in when it happened. But, realistically, I probably would have been fine had I had to move. At Cambridge many of my friends came from state schools and didn’t seem any the worse (some better) for it.

I am now a governor of a state primary. When they have fundraisers, they are lucky to get a few hundred pounds towards ‘luxuries’ such as a drama therapist or some art supplies. Meanwhile, back in the private sector, a school I know well had a ‘giving tree’ where to get a gold leaf, you needed to donate £10,000 (a mere £1,000 for a silver leaf). The millions raised (in total it was millions) went towards yet another flashy building designed by a famous architect.

If some of the parents on here genuinely do move their children, they could instantly quadruple (at least) the fund raising capacity of your average state school. Part of the problem within the state sector is the opting out of a large section of the middle classes who could, if they got involved, make a transformative difference to them.

But, back in the real world, the vast majority of parents will hardly notice the extra 10% rise (it won’t be 20%, 5% can be reclaimed and they will easily find savings for another 5% or so). Maybe the netball trip will have to go to Eastbourne this year, rather than the Caribbean.

Yes, some parents will genuinely struggle and a small percentage will really have to move. But that happens every year at private schools when parents’ circumstances change disadvantageously or the fees go up by their normal inflation plus 2 or 3%.

but the fees will be going up by the normal amounts and then the 20% VAT on top of that. I haven’t done the maths to work out the cumulative increases but adding a 20% increase on an increase of 8% or so each year is a lot more. If you have one child, maybe manageable but more than one? Not so much.

most parents in our school are worried.
not all will move. But we know several that did not take the offered place this year on the basis that labour were likely to get in. Multiply that up and the numbers don’t add up.

supporters of the policy seem very keen to say cut back to the parents. Maybe they don’t want to, maybe they can’t. Labour doesn’t get to demand that parents do so in order to make this policy a revenue raiser rather than costing the country money.

and in relation to the fund raising capacity of state schools - I think saying private school parents will increase this is doing a disservice to existing state school parents. When we move to state, my focus will be on supporting my kids and putting the fees I would have spent on their education into a house deposit. I will do as much, but no more than other current parents as I too will be juggling job, children experiencing change etc.

Unless you’re expecting private school parents moving to donate the fees they would have paid (or a giving tree proportion of them to the school?)
in addition to the %share of tax already paid?

Given those parents are so happy to give money to a school that doesn't need the money that much, presumably they would be more than happy to do the same for a state school?

Again, I suggest that labour don’t get to demand how I spend my money. We have never been in the position to donate such sums in addition to paying fees.

i’m assuming that state school parents , some of whom will have far more disposable cash than us, not having paid fees for the last however long are not expected to give such sums. If they, who have specifically benefitted longer term from that school are not expected to do this - not sure why you’d think I’d do it.

I am content that I am a net contributor tax wise to the economy - whether I use state or private schools. Not planning on being complying with being told I have to pay extra to use the state sector, the universal availability of which is the premise of this policy in the first place.

unless of course all the higher rate tax payers in the state school already do this, in which case I’d reconsider. But I guess that if they did then the arrival as suggested of private school parents wouldn't have such an impact on school fund residing as suggested above?