Vat on Independent school fees?

[gordondaviesmoustache]

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.

They pay it from their monthly salaries. And a number of those even struggle to pay on time (direct debits bounces every month).

Having an insight in the actual workings of these makes you realise it’s going to make a lot of parents suffer and their efforts to give their kids a better standard of education will be tested.

They’ll still find the money, just month to month, but it will still equate to finding a few grand over the course of a year.

I’m bound to say that anyone who makes a choice to spend their money on something that cannot stand (what will ultimately equate to) around a 10% increase always runs the risk of it becoming unaffordable. It’s no different from new cars or foreign holidays vs second hand cars and holidays in the UK. People have to make those choices every year.

I completely respect and defend people’s right to educate theur children privately but if they are making that choice then it should be subject to the same tax rules as any other professional fee.

 

[Kazzydeyna]

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.

They pay it from their monthly salaries. And a number of those even struggle to pay on time (direct debits bounces every month).

Having an insight in the actual workings of these makes you realise it’s going to make a lot of parents suffer and their efforts to give their kids a better standard of education will be tested.

If they can’t afford it, their kids will have to enter the state system.
It really is as simple as that.

If those same parents buy a house and interest rates go up and they then cannot afford the mortgage payments, should the state step in and pay the extra mortgage cost? No of course it shouldn’t.
It’s the exact same thing.

At what point do we say “enough”?

I am fundamentally against giving huge tax breaks to the wealthiest people in society at a time when the poorest are being squeezed so much.

Personally, I have to say I am losing confidence that this govt will have the balls to go through with this policy without severely watering it down first, but that’s just me.
If they stick to it and go all the way, it will be a huge statement that the era of tax breaks for the richest and most privileged is going to an end and I’m here for it.

I am sick of being told to be angry at the poorest in society “being lazy and putting their hand out” at the same time as seeing my hard-earned taxes being splurged on giving a huge tax break to the wealthiest.

If you cannot afford to put your kids thru private school, they’re going to have to mix it with kids from council estates in state school.
Believe me, eventually your kids will thank you for it.

 

[Blue and true]

They’ll still find the money, just month to month, but it will still equate to finding a few grand over the course of a year.

I’m bound to say that anyone who makes a choice to spend their money on something that cannot stand (what will ultimately equate to) around a 10% increase always runs the risk of it becoming unaffordable. It’s no different from new cars or foreign holidays vs second hand cars and holidays in the UK. People have to make those choices every year.

I completely respect and defend people’s right to educate theur children privately but if they are making that choice then it should be subject to the same tax rules as any other professional fee.

Excellent post.

 

[arbabarshad]

The argument that if you cannot afford to pay vat, just send the kids to state schools is against the governments argument that it’ll raise tax revenue.

The more kids who go to state schools will result in less tax revenue and more tax burden on state schools and the economy as a whole.

The number of pupils going to private schools who are really rich only make up around 20%.

6-10% are on bursary support
70-75% are sacrificing other things in life to give better education to their kids.

No matter how this policy is dressed up, it is symbolic in nature and ultimately substance.

 

[roubaixtuesday]

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.

The sources for your numbers?

Actual evidence thus far seems very clear: it's had no impact on numbers to date and isn't projected to have a significant impact.

Private school fees have increased way above inflation in recent years; a little belt tightening can be anticipated.

 

[stonerblue]

In england they dont but they do in other parts of the country.

Which other country?

 

[roubaixtuesday]

The argument that if you cannot afford to pay vat, just send the kids to state schools is against the governments argument that it’ll raise tax revenue.

The more kids who go to state schools will result in less tax revenue and more tax burden on state schools and the economy as a whole.

The number of pupils going to private schools who are really rich only make up around 20%.

6-10% are on bursary support
70-75% are sacrificing other things in life to give better education to their kids.

No matter how this policy is dressed up, it is symbolic in nature and ultimately substance.

"Sacrifices"

Who will think of the richest 5% in the country?

People making sacrifices are those at the bottom end of the income scale, not those at the top.

 

[arbabarshad]

The sources for your numbers?

Actual evidence thus far seems very clear: it's had no impact on numbers to date and isn't projected to have a significant impact.

Private school fees have increased way above inflation in recent years; a little belt tightening can be anticipated.

The sources for my numbers are first hand as I work on these numbers as my day job. And some of the numbers you won’t find on SCIS or ISBA or ISC websites.

The schools already rely on those above inflation fee increases to pay for teachers pay increase or pension increases which are usually above inflation. Even then some run on deficit to pay for those pay and pension rises.

70-75% of independent school costs are their staff costs.

If they didn’t increase fees one or two years to absorb vat rises, they’ll end up going down very quickly. Unless the government freezes pay and rises.

 

[arbabarshad]

Which other country?

Scotland is one. They have been paying business rates for few years now.

 

[roubaixtuesday]

The sources for my numbers are first hand as I work on these numbers as my day job. And some of the numbers you won’t find on SCIS or ISBA or ISC websites.

The schools already rely on those above inflation fee increases to pay for teachers pay increase or pension increases which are usually above inflation. Even then some run on deficit to pay for those pay and pension rises.

70-75% of independent school costs are their staff costs.

If they didn’t increase fees one or two years to absorb vat rises, they’ll end up going down very quickly. Unless the government freezes pay and rises.

Right. You can't quote any source for your numbers.

They're not credible.

So, they need to increase fees, and the size of 4x4s idling outside on the pavement will go down a bit.

Or they need to cut costs, and have slightly larger class sizes.

Cry me a river. Why should the rest of us subsidise the rich?