Maybe it isn’t just the £80m. Because it’s not the only impact.
- School closures that employ teachers and support staff and otherwise contribute to economy
- redundancies resulting in lost tax and national insurance revenue (£1m a year for every 200 staff made redundant approx)
- for every £1m a private school takes in fees, it spends approx £300k on overheads. 10,000 students moving out of private schools means approx £45m less contributed to the economy
- local councils losing out on business rates income from the closing school. For 10,000 students - approx lost income of £10m.
- cost to hmrc to employ new people to facilitate the registration and compliance of vat
There will be many other businesses who supply goods and services to independent schools that will suffer as well. And vat reclaims on Capital spend over £250k in the past ten years will also be reducing the actual intake of tax over the next ten years.
There will be more issues to consider as well but the tax collection from this policy will be not close to the amounts thrown around. So it’ll end up being more of a symbolic policy.
They don't pay business ratesMaybe it isn’t just the £80m. Because it’s not the only impact.
- School closures that employ teachers and support staff and otherwise contribute to economy
- redundancies resulting in lost tax and national insurance revenue (£1m a year for every 200 staff made redundant approx)
- for every £1m a private school takes in fees, it spends approx £300k on overheads. 10,000 students moving out of private schools means approx £45m less contributed to the economy
- local councils losing out on business rates income from the closing school. For 10,000 students - approx lost income of £10m.
- cost to hmrc to employ new people to facilitate the registration and compliance of vat
There will be many other businesses who supply goods and services to independent schools that will suffer as well. And vat reclaims on Capital spend over £250k in the past ten years will also be reducing the actual intake of tax over the next ten years.
There will be more issues to consider as well but the tax collection from this policy will be not close to the amounts thrown around. So it’ll end up being more of a symbolic policy.
The 10,000 number is before the vat had been put in place. Most private schools expect a drop of 10% in their numbers and are projecting their budgets based on that. Given total number of private school pupils is around 600k. This number will be closer to 60,000 by June 2025 and more in future.Right, so the IFS is wrong.
None of the consequences you outline (some of which are real, some not) come anywhere close to the projected tax take from this.
But the larger point I was making was different; the 10,000 number is so small it's actually *less* than the fall in state rolls.
In england they dont but they do in other parts of the country.They don't pay business rates
It won’t be close to 10%. The overwhelmingly majority will find the extra few grand one way or another.The 10,000 number is before the vat had been put in place. Most private schools expect a drop of 10% in their numbers and are projecting their budgets based on that. Given total number of private school pupils is around 600k. This number will be closer to 60,000 by June 2025 and more in future.
Not forgetting, a drop of 60,000 in private school pupils is a drop of approx £900m in fees (average of £15k). If the government only thinks this number will be less than 5% and are projecting this number to be less than £400m. Means they’re banking vat of around £80m to £100m in their calculations that most likely won’t be raised.
The government or IFS won’t have budgeted wrong for the first time.
70% - 75% of parents in some of the biggest schools in Scotland pay their fees over 10-12 months. They’re the ones who are worried and aren’t rich people who can just pay extra few grand at the start of each term or academic year.It won’t be close to 10%. The overwhelmingly majority will find the extra few grand one way or another.