What changes will you need to make for the VAT increase?

[36plus3]

Because contrary to what a lot of Mumsnet think, we're not all "really rich". The kids are already on scholarships which helps a bit.

To be able to afford the VAT increase I am going to increase my working days from 4 to 5.

Anyone else having to make big changes to afford it?

No hardship (did anyone actually use that phrase?) but, in the short term, we're going to move much nearer to the really good grammar as that'll be the natural break for us. But in the longer term, and as a back up/alternative, we're thinking about a move abroad - Bermuda, Cayman maybe - salaries and relocation packages make it an attractive option.

Goodbye.

I don't think anyone who refers to state education as "rubbish schools" will be much of a loss to the UK.

@Beouf - my DCs are in state education! In case you hadn’t noticed (head in the sand?!), the quality differs massively from school to school.

So can we please stop pretending it is only private school parents pissed off at this VAT nonsense. Plenty of us state parents who were hoping for some proper cash injection into the state sector as opposed to this big fat lie. Where I live all the good state secondary schools are massively oversubscribed and there is huge competition for the good ones (comp and grammar). And the not good ones people don’t want their kids to go to. So what is the actual plan to improve the not good ones?!

“I've looked into every option for EU passports for my children - no go.”

@Kendodd - the EU put forward a suggestion recently to the British Government to make moving and living/studying there easier for young British people. Both main parties said no! However, there is still the possibility that the EU will want to attract our young talent in the future and so they may make it easier for the qualified and young to go there. The will is clearly there. They know young Brits are up for it and that our Governments only care about the NHS and the elderly vote. I suspect there will be opportunities for young Brits in the future.

I am going full time (from 4 to 5 days). I probably would have done so anyway but no real choice now as school fees (or current school fees and child care for our youngest who is currently in state primary) take up almost 100% of my take home salary now (excluding bonus - which I never rely on for day to day spending). So need to build in some head room.

But it will massively put back any other spending plans we have. I am going back to work to give us back our savings buffer which would be below our personal tolerance levels otherwise. The VAT money would have been spent on things like housing renovations and a new car over the next 4-5 years - which we won't do now until we have a lot more cash in the bank - probably need 50% more in savings to justify the spending and not leave ourselves exposed. We don't have fancy holidays (I'm not asking for sympathy - just stating that's not something we currently prioritise) so spending in that area will not decrease or increase. So I think the govt will be up a bit on my additional income tax but neutral on the VAT vs VAT on other spending.

But we are conscious that, as two higher rate PAYE tax payers, we are going to a massive target for the labour government so probably we will be hit by multiple difference tax changes - pension raid or re-introduction of the LTA, higher income tax or NICs changes, and limits on our ability to save in ISAs etc so we will just need a lot more savings to generate the same life style. At this stage I have given up on my state pension - I think the likelihood I'll get one is about 30%. So it will make us very cautious because we don't have family money to rely on if things go wrong - might need to freshen up the life insurance and critical illness too!

We probably will look at state sixth form more closely than we otherwise would have - if there is a good selective option and the private extra curricular are no longer a massive draw/part of the kids' life then it may be sensible. I probably wouldn't bother if all things were equal and VAT wasn't coming in.

oh and our kids have EU passports and we will actively encourage them to go to uni abroad. that is partially because I genuinely think the country has massively deteriorated since Brexit - which makes me really sad when I compare the energy and positivity of the world when I started my career. But actually also as we live in London and it would be good for them to get out of the big city bubble and see something else of the world on their own terms. Holidays are all well and good but it's a totally different experience to live and work and study in a new country on your own as an adult.

No. We chose private because moving was not an option to us due to caring responsibilities. That remains the case, but we will just do less caring ultimately.

Once we committed to private we intended to have both children there right through. We are very unhappy about moving dc1 from a school he loves and expected to attend until 18. I would never have done that to him.

We will stop piano and Judo classes and school trips for our dd. In the meantime we'll think about getting the ball rolling on an ehcp.

However, I'm not convinced he school will survive it. They conducted a survey - circa 60% of families said they would either have to remove their child/ren or seriously consider it.

This is a small independent (reasonably priced) school that caters for children with anxiety. It's been a lifeline for us, and many other families who's children had EBSA in the state sector. I'm gutted.

I don't understand all the people who are saying they will move house and send their dc to a state school as they can't afford the additionL VAT.

Surely the cost of moving outweighs the VAT rise? We moved last year and, with stamp duty, EA fees, conveyancing, removals etc it cost us almost £50k. That would cover a lot of years of additional VAT.

Three more years to get through and will need to ask my parents for financial support. I can’t extend my hours or find a higher paying job as I’m already one of the highest paid for what I do in the local area.

My worry is the school will close, then I would have to cut my hours and home ed a reluctant learner with learning difficulties, so the government will need to extend mental health services for parents in the same boat (only half joking).

And what no one has mentioned is the very negative effect on the children of moving from small nurturing supportive schools with a large amount of one-on-one tutoring to the state environment. Before anyone says they will have to suck it up like every other child, since when was education supposed to be a race to the bottom?

This. Its a stupid policy.

It doesn't stop people buying an education for their children. Those in the state sector pay for it by being able to afford houses in the catchment of the state schools with the best exam results. All that will happen is that there is now even more demand for housing within the catchment of these schools.

I'm really tired of my peers who proudly pronounce their anti private school stance then use their wealth to move house to a good catchment area.

I did not go to private school and my kids won't either. That doesn't stop me from seeing the hypocrisy of all this.

It partly depends on how many children you have and their stage of schooling. If you had, e.g., 3 of primary age you would be looking at much more than £50k of VAT if you kept them in till the end. Plus if there is increasing competition for the most desirable schools then your house price is likely to do well in the coming years. It would make much more financial sense over the long term to move and take the hit now.

Because it’s not just one child, it might be two or three and inflation is still zooming upwards.

School fees have already gone up exponentially in the last 3 - 4 years. Possibly 20/25%.

Add on VAT and you’re looking at a 40% uplift on 4 years ago.

I don’t know anyone who has had a 40% pay increase over that time. And the general cost of living has had an impact too.

Squeeze them until the pips squeak sounds about right.

I agree with previous poster about looking elsewhere long term. This country has been poorly run for decades.

Labour improved things during one of the biggest ever bull runs from 1997, they benefited from stable economics globally. It’s different this time, sadly. I hope voters won’t be disappointed by how little they will be able to do.

I agree state education needs so much more funding but this policy will raise around 14% of what’s actually needed to bring it back to Labour years 1997+

Where will the rest come from?

It feels like the politics of envy and playing us off against each other when really the 0.5% of wealth in this country DOUBLED their wealth in the last 4 years is really where the finger should be pointed.

Of course Labour like the Tories won’t target this segment because they are their donors/friends/cronies and yet there’s huge popularity for this sort of tax on multimillionaires.

I'm not sure if Labour gets in they can- there's an EU directive against taxing education which I believe we are tied to.
School fees go up every year, add VAT on top and it will be unaffordable for many, not just those who have to curtail a few holidays and luxuries.
My children are done with school, but if it had come in I would have struggled to afford DD to complete her sixth form in private school - I ring fenced the fees years ago when my husband passed away and then on selling my house, they don't come out of my income which is under £40k. I budgeted for typical increases and it's only because my son went to a vocational college at 16 that I was able to afford the move to a more expensive London school for my DD. So with the VAT it would have meant not only no holidays (and we've only been on one since the pandemic stopped travel), but also some serious other cost cutting. Just this past year I've spent about £1000 on train and hotels when looking at universities. Driving lessons £800, our one trip to visit family abroad £4000. Those on top of regular expenses. I also had to replace our washing machine, pay for scaffolding to make a repair. Those things may be part and parcel of living but still hit the budget hard. To come up with an extra £5-6000k a year for fees from our normal household budget would have been very tough, and if she was younger impossible.

https://www.oxfam.org/en/press-releases/wealth-five-richest-men-doubles-2020-five-billion-people-made-poorer-decade-division

“Wealth of five richest men doubles since 2020 as five billion people made poorer in "decade of division," says Oxfam
Published: 15th January 2024

Fortunes of five richest men have shot up by 114 percent since 2020.
Oxfam predicts the world could have its first-ever trillionaire in just a decade while it would take more than two centuries to end poverty.
A billionaire is running or the principal shareholder of 7 out of 10 of the world’s biggest corporations.
148 top corporations made $1.8 trillion in profits, 52 percent up on 3-year average, and dished out huge payouts to rich shareholders while hundreds of millions faced cuts in real-term pay.
Oxfam urges a new era of public action, including public services, corporate regulation, breaking up monopolies and enacting permanent wealth and excess profit taxes.”

Its these people that need taxing properly in this country, our version of this.

But No government will. Why???

it’s daft. They could raise the £14b needed instantly. But instead they create an invidious policy like this.

Not everyone who uses private school is in the 1%.

Make the state system genuinely better and private schools will close.

Well yes there are moving costs but I won't be paying school fees for secondary school if I move so I can afford to buy a bigger house in the catchment area with no school fees going forward. It's not like I'm saying I'll move house and still pay school fees.

@mondaytosunday we aren’t part of the EU anymore so does this apply to U.K. policy?

For us it’s around £8000 a year for the the next 2 years and then £12000 a year for 3 years and then £14,000 a year for more years than I'd like to think about! That's not taking into consideration at least a 5% a-year rise which has become the norm.

We've spent £180,000 so far and we are nowhere near the end.

There is no plan :( It's too expensive. We need about 15 billion. The only people that will win is the envy brigade and that will only be a fleeting win as it won't change a thing. Lots of people are deciding at the moment to keep existing children in but any younger children, they will keep at state schools but move to better areas to get into the more affluent schools.