VAT - Private school - does it apply to preschool and nursery??

Saint84

Hi all

quick question. My 3 yr old is in preschool. This is school is part of a wider private school.

does this mean if Labour come into Government, the VAT will apply to under 5s or will it just apply to children from year 1. 

elsien

No one can answer your question until a) labour gets into power and b)they decide which of their election pledges they are following through with and how.
Until then, it’s all just speculation.

la531983

Nor would it come in immediately anyway

Flugelhorn

who knows - might take years to come in, might be gradually introduced, might be "forgotten" in flurry of other things .

kinger101

Extremely unlikely given the 25 percent top up.  One hand would be giving while the other takes away.  Those with ANI above £100K already lose out on 15 of the 30 hours, and lose the 25 pc top up.  Charging VAT on top of the income which has already been taxed at a marginal rate exceeding 100 pc would be really cruel.

TBH, the whole policy is solely about envy.

Someone sending their child to private school is already saving the Government about 7K a year as they don't have to be taught in the state sector.

sheramber

It is estimated that 20% of private school pupils would leave if VAT is levied on the fees.

What councils have the school places available to take in these children

e.g   

20 -30% of children in Edinburgh are privately educated so the policy is very likely to require big changes to education providers in Edinburgh and some areas of the Lothians.


Prior to the policy being announced, Edinburgh's projections for school capacity flagged 9/23 secondary schools as being 25 at or exceeding capacity in 2023, rising to 18/23 in 2027.

norsefox

kinger101 said:

Extremely unlikely given the 25 percent top up.  One hand would be giving while the other takes away.  Those with ANI above £100K already lose out on 15 of the 30 hours, and lose the 25 pc top up.  Charging VAT on top of the income which has already been taxed at a marginal rate exceeding 100 pc would be really cruel.

TBH, the whole policy is solely about envy.

Someone sending their child to private school is already saving the Government about 7K a year as they don't have to be taught in the state sector.

I think many would like it to be about envy.  It's more reducing privilege.  State school aren't VAT exempt.  The effective subsidy should never have been arranged in the first place.

The economy is a very difficult position, and will be the foreseeable future.  How we lessen the burden on individuals (growth plans etc) is a good debate, but it will be evermore difficult to justify subsidies and preferential treatment.

And I say that as someone whose marginal rate of tax is >100%.  There's no envy here - just simply a recognition of the times.  If we were building a state from the ground up, a tax subsidy for private schools would be one of the last things to provide when allocating finite resources, so it being removed at this stage seems perfectly reasonable.

And for the other aspects, if the best-off (or more well-off) in society were more engaged with their respective state schools, the quality of education would be better for everyone.  Whether that time, focus, money, or influence.  Those who want a better future for their children will positively influence it in whatever way they can - it may just be that some can't simply buy access to it in the same manner any longer.

kinger101

norsefox said:

kinger101 said:

Extremely unlikely given the 25 percent top up.  One hand would be giving while the other takes away.  Those with ANI above £100K already lose out on 15 of the 30 hours, and lose the 25 pc top up.  Charging VAT on top of the income which has already been taxed at a marginal rate exceeding 100 pc would be really cruel.

TBH, the whole policy is solely about envy.

Someone sending their child to private school is already saving the Government about 7K a year as they don't have to be taught in the state sector.

I think many would like it to be about envy.  It's more reducing privilege.  State school aren't VAT exempt.  The effective subsidy should never have been arranged in the first place.

The economy is a very difficult position, and will be the foreseeable future.  How we lessen the burden on individuals (growth plans etc) is a good debate, but it will be evermore difficult to justify subsidies and preferential treatment.

And I say that as someone whose marginal rate of tax is >100%.  There's no envy here - just simply a recognition of the times.  If we were building a state from the ground up, a tax subsidy for private schools would be one of the last things to provide when allocating finite resources, so it being removed at this stage seems perfectly reasonable.

And for the other aspects, if the best-off (or more well-off) in society were more engaged with their respective state schools, the quality of education would be better for everyone.  Whether that time, focus, money, or influence.  Those who want a better future for their children will positively influence it in whatever way they can - it may just be that some can't simply buy access to it in the same manner any longer.

State schools don't charge so there is no VAT.  

There is no subsidy for private education.

Someone is paying for something out of their own picket which they would otherwise have got for free.

If we want to improve the standard of education, we should do it out of general taxation.

FYI I probably won't send my child to private school, but if it's about removing privilege, the solution would be banning private education.  

The truth is the very rich will dodge the VAT through an avoidance scheme.  Those struggling to find the fees will be faced with a tough choice.

DBdoobydoo

kinger101 said:

norsefox said:

kinger101 said:

Extremely unlikely given the 25 percent top up.  One hand would be giving while the other takes away.  Those with ANI above £100K already lose out on 15 of the 30 hours, and lose the 25 pc top up.  Charging VAT on top of the income which has already been taxed at a marginal rate exceeding 100 pc would be really cruel.

TBH, the whole policy is solely about envy.

Someone sending their child to private school is already saving the Government about 7K a year as they don't have to be taught in the state sector.

I think many would like it to be about envy.  It's more reducing privilege.  State school aren't VAT exempt.  The effective subsidy should never have been arranged in the first place.

The economy is a very difficult position, and will be the foreseeable future.  How we lessen the burden on individuals (growth plans etc) is a good debate, but it will be evermore difficult to justify subsidies and preferential treatment.

And I say that as someone whose marginal rate of tax is >100%.  There's no envy here - just simply a recognition of the times.  If we were building a state from the ground up, a tax subsidy for private schools would be one of the last things to provide when allocating finite resources, so it being removed at this stage seems perfectly reasonable.

And for the other aspects, if the best-off (or more well-off) in society were more engaged with their respective state schools, the quality of education would be better for everyone.  Whether that time, focus, money, or influence.  Those who want a better future for their children will positively influence it in whatever way they can - it may just be that some can't simply buy access to it in the same manner any longer.

State schools don't charge so there is no VAT.  

There is no subsidy for private education.

Someone is paying for something out of their own picket which they would otherwise have got for free.

If we want to improve the standard of education, we should do it out of general taxation.

FYI I probably won't send my child to private school, but if it's about removing privilege, the solution would be banning private education.  

The truth is the very rich will dodge the VAT through an avoidance scheme.  Those struggling to find the fees will be faced with a tough choice.

The beauty about VAT as a tax is that it's very difficult to avoid so it will be interesting to hear details of this avoidance scheme that the very rich will take advantage of.

What does it matter if some parents direct their discretionary spending elsewhere instead of wasting it on private school fees?

kinger101

DBdoobydoo said:

kinger101 said:

norsefox said:

kinger101 said:

Extremely unlikely given the 25 percent top up.  One hand would be giving while the other takes away.  Those with ANI above £100K already lose out on 15 of the 30 hours, and lose the 25 pc top up.  Charging VAT on top of the income which has already been taxed at a marginal rate exceeding 100 pc would be really cruel.

TBH, the whole policy is solely about envy.

Someone sending their child to private school is already saving the Government about 7K a year as they don't have to be taught in the state sector.

I think many would like it to be about envy.  It's more reducing privilege.  State school aren't VAT exempt.  The effective subsidy should never have been arranged in the first place.

The economy is a very difficult position, and will be the foreseeable future.  How we lessen the burden on individuals (growth plans etc) is a good debate, but it will be evermore difficult to justify subsidies and preferential treatment.

And I say that as someone whose marginal rate of tax is >100%.  There's no envy here - just simply a recognition of the times.  If we were building a state from the ground up, a tax subsidy for private schools would be one of the last things to provide when allocating finite resources, so it being removed at this stage seems perfectly reasonable.

And for the other aspects, if the best-off (or more well-off) in society were more engaged with their respective state schools, the quality of education would be better for everyone.  Whether that time, focus, money, or influence.  Those who want a better future for their children will positively influence it in whatever way they can - it may just be that some can't simply buy access to it in the same manner any longer.

State schools don't charge so there is no VAT.  

There is no subsidy for private education.

Someone is paying for something out of their own picket which they would otherwise have got for free.

If we want to improve the standard of education, we should do it out of general taxation.

FYI I probably won't send my child to private school, but if it's about removing privilege, the solution would be banning private education.  

The truth is the very rich will dodge the VAT through an avoidance scheme.  Those struggling to find the fees will be faced with a tough choice.

The beauty about VAT as a tax is that it's very difficult to avoid so it will be interesting to hear details of this avoidance scheme that the very rich will take advantage of.

What does it matter if some parents direct their discretionary spending elsewhere instead of wasting it on private school fees?

Prepayment of fees before the VAT is introduced.  Splitting of boarding fees into nontaxable accomodation v school fees where boarders get a heavy discount on the latter.

It kind of matters in that the UK government now have to fund the schooling iof children that they didn't pay for previously.  Likely there will still be a net benefit in terms of tax raised, but I suspect it will be much lower than the amount suggested.

As Sheramber also indicated, while on average 7 per ent if children are privately educated, the are some regions where this is much higher.  Even a small percentage moving from private to state may be a challenge in these areas. 

On top of that, we must also remember that those with the financial means can also buy properties close to the best state schools. 
 
In short, I think this policy has not been thought through.