VAT a big fee mistake! Post Reply

[Scottov]

As for VAT, fine. If they want to remove the charitable status, so be it. But then I don't want to finance bursaries or scholarships, sorry. Happy to do so if it is a charity but not if it is a business. I dont see any Porsche drivers sponsoring a Porsche for me to enjoy. 

At the moment, at my kids' schools more than 50% of kids receive bursaries. But hey, if Labour and Labour supporters do not see the value in it, why should I?
 

Good post

You are correct, full fee payers (rare as they are outside of london and the M25) do subsidise bursaries ; and this is because of the demands of charitable status.

And the point about the number of people receiving bursaries is this: they are MEANS TESTED.

So these families are already paying as much as they can afford. There is no additional 20% for them to find, because if they was then they’d be receiving less bursary

[Scottov]

Hard dislike for the snobby attitudes displayed towards state schools by original poster and the blasé ill-informed comment as to why private school kids end up 'running the country".
Yes because their education is so much better.
That's definitely the reason.
Please check your self-reinforcing privilege.

I'll share this anecdote from a good friend, a professor in a sought-after subject at a sought-after RG uni who remarks she has for some time employed her own internal Alevel 2- grade adjustment to account for spoon-fed over-taught private school kids who often disappoint.
But yes their education is definitely better!

But no you keep telling yourself how much better a product you're getting for your money.

London Day schools are not the Industry but private equity seems happy to buy them.

The idea that you should not pay tax for this already-inflated over-priced luxury good is quite at odds with how valuable you seem to think it is, no?

No

[DavidWT]

It's a dreadful idea. The unintended consequences will be disastrous for many families, not forgetting the possible closure of many private schools....and where do those kids then go to school if the local state schools are already full?  I feel sorry for the kids here, as well as the hard working mums and dads.  

But a question, and correct me if I am wrong, but if a school becomes a VAT registered business then surely it follows that they can claim the VAT back on all items the school purchases. Schools have to buy a lot of equipment throughout the year, plus carry out refurbs and repairs to their buildings etc. So if this is correct the govt might gain some VAT from school fees but I expect they could lose more than they gain from VAT reclaims.

I'm not accountant and nor have I delved into this in any depth, but that's my understanding. 
 

 

[readysteadycook]

This policy will just reduce the number of free places and bursaries to almost zero. It’s obviously not fair that paying parents subsidise others anymore.

With this Labour policy, The private schools are soon to become the preserve of the very rich. Currently at £20k+ a year, day place, and then add 20%, how many can really afford that anymore.

Private schools will also then not have to share their facilities with state schools or have the other overheads they have with mixing with state schools. That will save the Private schools money, whilst the State school kids will also obviously lose out (along with their larger classes from private school leavers joining them).

So go for it, let’s vote Labour on 4th July and make private schools the preserve of the Uber rich (or m, vote for any independent candidate if you don’t agree with this policy).

[uttershambles]

I agree with many previous posters. My school is always proud to point out that 50% of its students don't pay full fees. There are lots of kids on either full bursaries or significant bursaries. On top of it, we are often asked to donate to the bursary fund which many people do and the school has a number of fundraising activities throughout the year to support their bursary fund. I'm sorry but, if we have to pay 20% extra, I no longer can or want to finance and contribute towards these bursaries. The whole point is that these 20% are supposed to make state schools better, right? So there should be no need for private school bursary funded places anymore. Something has to give. Surely, even the most hardened supporters of this scheme wouldn't expect any bursaries to continue. I think the whole situation is very reminiscent of the Brexit shambles and will. end in a similar fashion, where there are no winners and everyone will be a loser

[Scottov]

I agree with many previous posters. My school is always proud to point out that 50% of its students don't pay full fees. There are lots of kids on either full bursaries or significant bursaries. On top of it, we are often asked to donate to the bursary fund which many people do and the school has a number of fundraising activities throughout the year to support their bursary fund. I'm sorry but, if we have to pay 20% extra, I no longer can or want to finance and contribute towards these bursaries. The whole point is that these 20% are supposed to make state schools better, right? So there should be no need for private school bursary funded places anymore. Something has to give. Surely, even the most hardened supporters of this scheme wouldn't expect any bursaries to continue. I think the whole situation is very reminiscent of the Brexit shambles and will. end in a similar fashion, where there are no winners and everyone will be a loser

You are, of course correct.

However, the additional donations to fund bursaries are not the only way that full fee payers subsidise worthy pupils with bursaries.

Simply it’s the aggregation of fees at different rates of collection.

So for example if fees are £1,000 per term and 50 pupils pay £600 and 50 pupils pay £1,000 you have total fee income of £80,000 or a total bursary rate of 20% with total fees per pupil of £800 per head

So your child pays £1,000 but only £800 is available for the operating model

That’s how you fund bursaries

The idea that those 50 pupils paying £600 can suddenly find an additional 20% VAT is for the birds. Not going to happen

So that additional 20% Vat will be levied on the gross fee base I.e. £20,000 will have to be paid to HMRC

In this scenario the 50 fee payers at 100% will no longer need to pay £1,000 per term they will need to pay £1,400 (a 40% increase) to maintain the same fee rate

I.e
Bursary pupils £30,000
Full fee pupils £70,000
Vat (20,000)
Retained school income £80,000

Which is the same as before

This policy measure is ridiculous. And even if the VAT is only leveraged on the net reduced fee rate for the bursary pupils then it’s open to manipulation which HMRC won’t like and the burden is still carried by the full fee payers

[Terrier_London]

It's not a big mistake.

We should help narrow the gap between public and private schools. We here can afford to.

Just take a step back and consider the rest of the country. We live in our little bubble in Nappy Valley, and the cost of living crisis has barely been noticed here. We still ski once or twice a year. Most of us have one or two kids at private school. We drive 4x4s. We have it really good. But that shouldn't come increasingly at the expense of those less fortunate. 

I think we need to recognise we have broader shoulders and could pay more tax. I support paying more taxes to improve social services and national infrastructure. Labour are going to win in my constituency anyway, as they have done for the last few elections, so doesn't matter too much what I do.

The answer certainly is to vote Reform or any of the other fascist dog whistle parties. Give your heard a wobble if you think that's a sensible vote.

 

[Scottov]

It's not a big mistake.

We should help narrow the gap between public and private schools. We here can afford to.

Just take a step back and consider the rest of the country. We live in our little bubble in Nappy Valley, and the cost of living crisis has barely been noticed here. We still ski once or twice a year. Most of us have one or two kids at private school. We drive 4x4s. We have it really good. But that shouldn't come increasingly at the expense of those less fortunate. 

I think we need to recognise we have broader shoulders and could pay more tax. I support paying more taxes to improve social services and national infrastructure. Labour are going to win in my constituency anyway, as they have done for the last few elections, so doesn't matter too much what I do.

The answer certainly is to vote Reform or any of the other fascist dog whistle parties. Give your heard a wobble if you think that's a sensible vote.

 

Levelling down is an insane idea.

Which is what narrowing the gap by knobbling the best education system in the world is.

It’s not Finland, it’s not China and it’s not India - they have the best state education; the best quality secondary education in the world is the British Independent sector

Succumbing to silly voices on this subject is asinine

[uttershambles]

Omg Terrier_London. You sound truly awful and as out of touch as Sunak was with his "no Sky as a child" comment...

"We here can afford it", "the cost of living crisis has barely been felt here", "we still go skiing once or twice a year" (my children have never been skiing and neither have I... ) "We all drive 4x4"... I don't... People like you give this area a bad name... Please speak for yourself. Not "we here"... We are not a homogeneous group.

"I here" can't afford to take my kids skiing - I'm ok with it as I chose to invest money in their education instead. "I here" don't drive a 4x4. "I here" feel the pain of rising cost of living, every day and big time. "I here" don't have broad shoulders and can't afford to pay addition extra. I just chose to make sacrifices because I believe good education is the most important thing j can give my kids.

I actually find your post incredibly upsetting

[Euroqueen]

Wow Terrier_London... Just wow...