Scrapping VAT and removing charitable schools - Labour policy - do you agree with it ?

[bluenova]

I don’t want the tories to stay in but bloody hell a credible alternative with sensible policies would be nice.

this isn’t a well thought through policy just a cheap vote winner where the only beneficiaries will be the elite private schools and the excessively wealthy.

The Institute for Fiscal Studies reckons it'll result in a £1.3b-£1.5b net gain for Govt. finances.

Labour have said that any gains will be used to increase education funding, and would be targeted at the most disadvantaged students.

So, it's something that has been considered in detail, and the main result would be a transfer of govt spending from the moderately wealthy to the poorest in society.

 

[halfmist]

Thats not really true though unless you are just looking at Eton, Harrow, Winchester, Westminster or Fettes where its a minimum of 30k+ per year.

There are lots of other public schools (fee paying independent schools) which are less well known that are around 15k per year. These are more than affordable as my nextdoor neighbour, a chartered accountant, who sends her 3 kids to a nearby independent school, would attest.

If the schools offer a significant number of scholarships which allow gifted kids via entrance exams, regardless of financial means, a place to get a high quality education then maybe charitable status is valid. What a significant number of scholarships is, well thats open to debate, but to me it wouldnt be unreasonable to say 15%.

Those however that are only open to the exceptionally wealthy should be taxed fully and stripped of charitable status.

How would you determine the exceptionally wealthy.
Would the parents have to submit their tax returns to the school.
There is always a time lag on wealth from earning it a declaring it on a Tax Return.
Most people’s wealth is tied up in Capital items rather than income so asking everyone to list all assets they hold over say £2000, good luck with valuation.
It just wouldn’t work in the real world.

 

[Kompany Car]

the Nuffield Foundation research says that between 3 to 5% of kids would have to leave over affordability - thats 20-40k attendee's - there are over 32k state schools and colleges currently. So its likey they will be looking to accept a couple each.

Not quite sure how that relates to my post. My personal opinion is that as much as we dont like it, its very difficult for someone from a "normal" background to have the education and opportunities afforded by the connections made in public schools. Scholarships, the number of which should be significantly more that what they are currently, allow this to happen for the most able kids, regardless of wealth.

If you remove charitable status then the drawbridge will be lifted and it will purely be a school for the wealthy with no social mobility.

You can go down the route of lets try to make everyone the same which puts more barriers to social mobility or accept that the wealthy will always have their kids privately educated but have the chance for some of us from more humble means to influence the financially elite.

Its a bit like those who wanted to get out of Europe by voting for Brexit because they weren't happy with certain policies and then expecting to influence European policy from the outside, it doesnt work.

 

[halfmist]

If the policy works we'll no longer be collecting VAT on them anyway.

Bankrupt the lot of them.

And people like you Sir, with comments like that, are the reason why the Left struggle to be trusted to form a credible Government.

 

[bluethrunthru]

If you remove charitable status then the drawbridge will be lifted and it will purely be a school for the wealthy with no social mobility.

well thats fine - I am not against them per se but why do they avoid VAT when the state schools my kids went to don't? In what way are they charities?

 

[Kompany Car]

How would you determine the exceptionally wealthy.
Would the parents have to submit their tax returns to the school.
There is always a time lag on wealth from earning it a declaring it on a Tax Return.
Most people’s wealth is tied up in Capital items rather than income so asking everyone to list all assets they hold over say £2000, good luck with valuation.
It just wouldn’t work in the real world.

I never said it was easy, but you could start by looking at the council tax band for their residence(s) and any residential properties held within businesses. Im not saying its the only or best method but its a starter for ten. The exceptional wealthy are unlikely to slum it.

 

[Kinkybyname]

The standard of grammar, punctuation and spelling (so far) in this thread, convinces me that some aspects of modern education are in dire need of attention for sure.

 

[halfmist]

well thats fine - I am not against them per se but why do they avoid VAT when the state schools my kids went to don't? In what way are they charities?

State schools are out of the scope of VAT so are not charged it.
Where supplies are done by a Registered Trader eg repairs the VAT can be recovered by the Local Authority who commissioned the work.

 

[Kompany Car]

well thats fine - I am not against them per se but why do they avoid VAT when the state schools my kids went to don't? In what way are they charities?

Schools dont pay VAT, anything from their educational operations is VAT recoverable.

Its only if they run a business from within the school or do things which are not related to education where VAT is chargeable/non recoverable.

 

[Kompany Car]

The standard of grammar, punctuation and spelling (so far) in this thread, convinces me that some aspects of modern education are in dire need of attention for sure.

Is this GDMs burner account ? ;-)

 

[bluenova]

Not quite sure how that relates to my post. My personal opinion is that as much as we dont like it, its very difficult for someone from a "normal" background to have the education and opportunities afforded by the connections made in public schools. Scholarships, the number of which should be significantly more that what they are currently, allow this to happen for the most able kids, regardless of wealth.

If you remove charitable status then the drawbridge will be lifted and it will purely be a school for the wealthy with no social mobility.

You can go down the route of lets try to make everyone the same which puts more barriers to social mobility or accept that the wealthy will always have their kids privately educated but have the chance for some of us from more humble means to influence the financially elite.

Its a bit like those who wanted to get out of Europe by voting for Brexit because they weren't happy with certain policies and then expecting to influence European policy from the outside, it doesnt work.

That sounds like it's a sticking plaster (and a very small one), for a broken system.

The extra money this generates will go to the most disadvantaged, and could make a significant difference to their education.

If we're then looking at replacing that sticking plaster with something more substantial, why not ensure that the % of privately educated students going to the top universities, or into publicly funded professions, matches the 7% who attend private school at secondary level. That would bring a lot more less wealthy people into positions of influence than a few more scholarships.

 

[Mr Kobayashi]

And people like you Sir, with comments like that, are the reason why the Left struggle to be trusted to form a credible Government.

I wasn't aware I was running for office. Other than donning a costume and paying £500 I haven't given it much thought.

 

[WestGorton]

Yes.

 

[bluethrunthru]

Schools dont pay VAT, anything from their educational operations is VAT recoverable.

Its only if they run a business from within the school or do things which are not related to education where VAT is chargeable/non recoverable.

You know full well the VAT exemption applies to fees paid for private schooling and state schools VAT is recovered by the local authority - not all pass all of it back to the schools

 

[meltonblue]

Absolutely in favour of it.

Posted it before but Sam Freedman is always a good read about this topic -

Why the Daily Mail’s defence of private schools doesn’t add up

Removing charitable status from private schools won’t lose Labour money – or voters.

www.newstatesman.com

 

[threespires]

There are plenty who are far from rich that send their children to private schools. If they wish to spend their money on that, I see no problem with it.

I completely agree I just don't think they should be getting a tax break.

I don't doubt that not everyone who sends their children to private school is rich but according to the ONS the median household income (after direct taxation) in this country pre COVID was £30k. The average annual cost of a private school is approx £15k. That suggests to me this is not a realistic option for a significant proportion of the population.

I don't think this tax break has any substantive value in terms of social mobility's it's simply a competitive advantage for the middle classes and upwards who already have the dice loaded in their favour. I say that as someone who would qualify as middle class.

 

[Kompany Car]

That sounds like it's a sticking plaster (and a very small one), for a broken system.

The extra money this generates will go to the most disadvantaged, and could make a significant difference to their education.

If we're then looking at replacing that sticking plaster with something more substantial, why not ensure that the % of privately educated students going to the top universities, or into publicly funded professions, matches the 7% who attend private school at secondary level. That would bring a lot more less wealthy people into positions of influence than a few more scholarships.

It doesnt work. Look at the FTSE 100 CEOs 26% were privately educated, thats against a figure of only 7% attending public school. Its even worse when you look at the the media which has some of the highest numbers of privately educated people. Of the 100 most influential news editors and broadcasters, 43% went to fee-paying schools. Similarly, 44% of newspaper columnists were privately educated, with a third - 33% - attending both an independent school and Oxbridge.

Whilst some of the power is in publicly funded professions, the real power is in banking and private multinationals. They influence policy decisions and the media decide what narrative to play.

If I look at the company I work for, its a multinational business and the higher you go up the tree, the more privately educated people there are, to the extent that at board level there is only one person who didn't go to a public school.

Whilst state schools are clearly underfunded, one of the biggest costs is providing support for kids being brought up in poverty and the problems that it brings. Reducing poverty is the solution to better schools as it is for most of the issues with society. More could be done by increasing taxation on wealth and/or income, but of course nobody wants to talk about that as it wont win votes. Surely on that basis taxing public schools is the token gesture or sticking plaster and an ineffective one at that.

 

[Kompany Car]

You know full well the VAT exemption applies to fees paid for private schooling and state schools VAT is recovered by the local authority - not all pass all of it back to the schools

So what you're saying is its mismanaged by the local authority.

 

[halfmist]

I completely agree I just don't think they should be getting a tax break.

I don't doubt that not everyone who sends their children to private school is rich but according to the ONS the median household income (after direct taxation) in this country pre COVID was £30k. The average annual cost of a private school is approx £15k. That suggests to me this is not a realistic option for a significant proportion of the population.

I don't think this tax break has any substantive value in terms of social mobility's it's simply a competitive advantage for the middle classes and upwards who already have the dice loaded in their favour. I say that as someone who would qualify as middle class.

Of course it is to obtain a competitive advantage otherwise they wouldn’t bother.
Let’s be frank here State Schools don’t attract the same quality of Teachers, pushy parents wanting value for money, competitive environment for the pupils, better learning environment, less disruption from the kids, discipline, choice of subjects, preparation for exams etc,need I go on.
Any parents wanting the best for their kids would opt for them to be privately education.
None of this nonsense of taking their kids out of school in Term time to save a few quid on the holiday using the excuse it will broaden the kids lifeexperience.
Fact, parents put their kids through private education to get the best possible exam results given their kids ability, of course that’s going to give them the best choice in terms of Uni and Career.

 

[Brewster's millions]

That sounds like it's a sticking plaster (and a very small one), for a broken system.

The extra money this generates will go to the most disadvantaged, and could make a significant difference to their education.

If we're then looking at replacing that sticking plaster with something more substantial, why not ensure that the % of privately educated students going to the top universities, or into publicly funded professions, matches the 7% who attend private school at secondary level. That would bring a lot more less wealthy people into positions of influence than a few more scholarships.

Why don’t we go the whole hog and just live in a dictatorship, where the state decides whether you’re allowed to go to university, what sort of job you do, what you’re allowed to spend your money on and indeed whether it’s actually worth getting out of bed in the morning?