Read this an tell me you still agree with VAT on school fees

[Sally20099]

DS is 3 years from finishing private school which includes 2 years in the sixth form. DD was due to start same senior school in Sept. Both went to private prep but due to talk of VAT on fees, and certainty of Labour govt for some time, we actually investigated sending DD to state secondary school. Only one in the entire city is rated outstanding but DD has got a place so we have decided to send her there. It’s very good academically but obviously hasn’t got the facilities of the private option. Currently school fees are £19,300 per year (before VAT) for DS so we have saved a reasonable sum by going to state school with DD. DS will finish at his school and we could afford DD fees (even with VAT) so we will instead put £12k a year extra in savings for DD and then spend the rest of the savings on an extra winter holiday. We would have never looked at state schools without the VAT policy and instead we have taken the place of someone at an outstanding rated school. Im not posting to annoy anyone, I wanted those who unequivocally support this to see some of the consequences. We also know a reasonable number of children in DS year who can’t afford fees with VAT and are taking their children out of private and going into state - and taking more places at the limited good schools. Its probably no surprise that most families in private schools happen to also live in good areas, meaning catchment areas tend to work out quite well when they go state.

My DC are in private schools, I will keep them there until I cannot afford to. All these threads re VAT in private schools are getting silly.

Or it closes because new admissions are down 50%.

i understand the point the OP is making - the intro of VAT is going to mean she is going to take a state place (the extra cost, whether you think it is right or wrong, made them reconsider) - therefore intro of VAT on private school in this instance is going to cost the country more than it raises. how will this help improve schools? the UK has huge debts and spends more than the tax is raises. if the government increases spending on education more than inflation it will be a miracle.

the logic follows is that private education is now subject to VAT and business rates (so it is more than just 20% if these costs are passed on) - this cannot just be schools ; nurseries , language courses, holiday clubs, after school / weekend clubs - 20% more for football, ballet, dance, fencing etc eg all profit businesses then… so some schools and nurseries and clubs etc will close… less jobs, less tax revenue… once a tax is increased / introduced it doesn’t ever decrease or is scrapped. remember when VAT was 17%!

some private schools are owned by profit making companies or chinese hedge funds - some are charities ie all profit is put back into the school AND they do outreach work for the community and other local schools

not all private schools are good or better than state schools - many in london don’t even have a kitchen to cook hot food or outdoor space. some people just want to pay!

as private schools are smaller (often the classrooms are cramped but ) the class
rooms themselves are smaller as the buildings are older, the IT, insurance, rent, pensions, salaries, utilities all cost more a child so in reality the fees aren’t buying as much extra as it would seem. some people just want to pay!

finally 1. VAT can be reclaimed for up to 10 years for building work - so this will mean the government won’t collect as much as estimated at first 2. much of the fees are not for education so maybe exempt eg cost of water rates per child etc 3. threats to raid pensions and increase IHT will mean that some grandparents who can will help meet extra private school costs but pay less tax on death

300K income = 150K in tax and no CB or nursery hours

so 150K net -

fees 2 kids, including all extras that private schools have eg lunch and school bus close to £60K including uniforms, trips, after school or morning club / a few holiday club weeks (so parents can both get to work)

remaining £90K
assuming not from wealthy background

so approx half £45K on rent / mortage and household bills this is for a 3 bed house in the SE.

so £45K for food (£10K)

£35K left for pension contribution (£5000 for them both probably should be more)

£30K left for a holiday £3000, loan for car and running a car £6000, pet (£2000), dentist , opticians, hair cuts, private medical insurance,

so that leaves the so called elite so about £7,500 a year each for each parent and i didn’t include clothes + shoes, train fares , birthdays, mobiles phone, cinema, theatre.

if any of the above costs are wildly wrong i am sure someone will tell me.

elite to me means on one income - second home, 3 holidays a year , and glamping at a festival plus long weekend away without children, 2 cars, grand house with pool or tennis court . 2 expensive cars …

so that leaves the so called elite so about £7,500 a year each for each parent

So each parent has money left per month after paying for a huge mortgage / big house, loads to their pension, masses for holidays, plenty for a decent car or two.

You know that's waaaay above what the average person in the UK has?

3 bed house - £2,500 pension contribution each contribution for adults who are say 40 now so won’t get a pension till they are 70+ if at all? i didnt allow any ISA savings
this is the elite so probably should

it costs £2,500 for a 2 bed ex council flat in east london so I don’t think £3,500 rent for a family house for the so called elite is crazy.

not leftover - i listed several items that are surely essential for anyone - kids need 3 pairs of non school shoes a year? the OP i was responding to gave this amount of money as “the elite”. well off, fortunate but not elite surely. even though in top 1% of earners. these are possibly uni educated 40s, corporate demanding jobs full time. contract but could be made redundant. i added some for pensions but i didn’t deduct the pension contribution from the employer.

The thing is, it doesn't matter what elite means to you. The kind of lifestyle that you describe would be far beyond the reach of most families in this country, and you just sound ridiculously out of touch with how normal people live.

That’s a massive amount of money. The mortgage alone (£45k repayment per year) would be for a house worth well over a million pounds (I live in a million pound house myself and my mortgage repayments are nowhere near that high). The balance on the mortgage would have to be over £800k.

You cannot possibly think that is “the squeezed middle”??

i think that paying £150K in tax and NI SHOULD mean that 2 working parents could afford to send 3 children to private school if they chose plus have an expensive car, a holiday, a pet etc - but it doesn’t. you would think that the elite could have 3 children. or at least not be concerned for their life style IF they did… i am not in this category and if i were i wouldn’t choose to live this way , merely playing devil’s advocate as to the meaning of “elite”. everyone lives on a budget even the king. when an already substantial cost rise be it petrol, electricity, food, rent / mortgage or education it is only natural to question whether it is worth it or can I use less / buy something cheaper. the VAT policy on school fees is doing just that . and no doubt VAT on ALL education will do the same. what the OP originally said and what I am asking is will this policy achieve its aim - to improve state education and if it doesn’t help could it actually damage the economy / lives of those buying or receiving education? private school children are already excluded from internships, various national schemes and pay more for access to some school trips.

Well, of course they will question whether it is worth the investment. As far as I'm concerned, it is insane that anyone thinks it's worth the investment in the first place, but of course, people can choose to spend their money on whatever they like.

I think that relatively few parents will actually take their kids out of private school in reality, and so I think the VAT will generate extra tax revenue. But of course, if the higher costs cause some families to reconsider, then they will be more than welcome in the state sector and I'm sure they will do well there.

…can you please explain your thought process behind thinking if high earners leaving the country it will trigger house prices to fall?

in your opinion are the kids in abject poverty in the uk the responsibility of all uk adult residents - or solely the responsibility of the few private school parents who have saved tax payers money by paying educating their children privately?

private school parents are not responsible for any poverty in the uk - if anything they have saved tax payers money by not using the government school system.

if kids are in poverty in the uk - we are all responsible - including you.

What a stupid post.

@Zonder indeed

Exactly - if a family earning £300k gross want to spend £90k on sending three children to private school, of course they can.

But if you choose to spend 60% of your take home salary on school fees (absolute insanity IMO), it shouldn’t come as a huge surprise that you don’t then have enough money left for the five bedroom house, Tesla and holidays in Mauritius.

The issue is £30k pa school fees, not VAT. School fees have risen by a massive amount to appeal to overseas parents, and people on non-oligarch salaries can no longer afford them. But neither can we afford “normal” family homes in many parts of London that were perfectly affordable on a single teacher’s salary a generation ago. Prices have risen and salaries haven’t kept pace.

Well you would have thought that against this backdrop a Government of a small but talented country would have realised that properly investing in state education for all and in particular, investing properly in SEN and poorer children (so that others can also learn in an undisrupted way) may have been a good idea. Sadly not, so what will the landscape be from here?
Those who can will fill the pockets of large tutoring businesses crammed full of ex teachers and ex private school teachers working from home from 4pm post school, Korea style.

I personally think a ton of parents will take their DC out of private school and ferry them around to extra curricular and work from home/cut hours accordingly. Jobs in the private sector will simply vanish and HMRC will be worse off, because private school charities, although inefficient, played by the book as regards taxes and working hours of staff etc.
As with the NHS, teachers from other countries will be imported to fill what is a job that is not fit for purpose and nobody here wants to do anymore due to the Ofsted bashing, insane marking and stress levels and rude kids that cannot be disciplined. 350k health and care visas in 2023? Get ready for teaching visas galore and more riots as the poor are priced out of anywhere crime free and decent to live and are forced into areas with no jobs and shit schools.

It’s not relevant to your post particularly, but I’d rethink your idea of saving a massive chunk for your dd. Yes spend on any additional activities/tutoring to make the schooling experience more fair but I’d worry about ds’s reaction. Maybe he’d have preferred the outstanding school and £100k too…..

On the plus side, there will be a massive boom in jobs in extra curricular clubs. So not all bad news.

OP - you do realise that OFSTED headings are by and large a load of bollocks don’t you.

God all you moaning private school parents that can’t actually afford private school do realise that what will happen is….some pupils will leave, they’ll go to state schools, everyone will get on with their fucking lives.

talk about main character syndrome. But I guess private school does that to you

What a ridiculous and ungracious comment. People engage with policies that affect them personally. In this instance, it’s to do with VAT on fees. They’re discussing it on a thread that’s about VAT on fees. That does not give them ‘main character syndrome’.

@Sugarlily - and what will you say if there is a legal challenge and the courts do find this VAT policy singling out a certain type of school to be illegal and discriminatory and anti competitive? Because state boarding tutoring still VAT free? When it is conceivable that VAT will have to be applied more uniformly to education to make it legal?

I'm interested in the claim that the VAT is discriminatory. Which protected characteristic(s) would it be discriminating against?

You are perhaps confused, and thinking of the Equality Act. However the word “discriminatory” has a broader meaning than that.

In this case it is referring to the legal challenge, where it means “singling out one thing rather than another”.