The Student Room Group

Charging VAT on private school fees

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Original post by Muttley79
So explain why inadequate fee-paying schools should not be forced to close.
Fee-paying school don't save the country anything - they try to poach teachers from the state sector by offering bribes - yes I've been approached multiple times. They cause a lot of the problems like creaming off bright children ...
If politicians had to use state schools the funding would soon increase.

The last point could extend to parents as well. If their children had to use public schools then more pressure would be placed on the schools and politicians to make them better, whereas at the moment no such pressure would exist if they can simply transfer their children to a private school which is performing well.
Reply 81
Original post by Talkative Toad
The money that’s going into private schools to educate these 600000 pupils could go to state schools that need that funding to be able to fund the (at least some of) 600000 private school pupils for example, that’s the point.
But state schools actually need to be funded more as a result of this policy or else I’m against this policy.

Ah ok I think you misunderstood me - sorry if I was unclear.

Zero government money is going towards private schools. In a theoretical situation where these schools didn't exist, the government would need to find a total of around 5bn pounds a year to educate these children (the government spends what you can assume is zero if private schools exist; parents spend this money). Without private schools, the government would be 5bn in debt (or there abouts). The money going into private schools to educate the 600000 is coming from parents or donations, which would never go to the government in any other way than tax. HOWEVER, the VAT will cause a spending increase of 2% in government schools - good - but I think that the repercussions on private education in particular, but also state education isn't a great idea; I'm biased too. What are your thoughts on the above?
Reply 82
Original post by Muttley79
Able children can do very well in state schools - we get people into top unis each year as have all the schools I've taught in.
Your view is clearly biased - schools work best when there is a spread of ability.
I'd like all inadequate fee-paying schools shut down.
It would also even the playing field if fee-paying schools were forced to pay the same salary as state schools - they are ripping off parents by paying bribes to get teachers to join them.
What don't you understand? It's pretty clear that politicians think 'their' children are different e.g. the recent news about a certain policitians son's 'need' for revision space!

I'm sure - but if their parents can afford private education or they can get in on a bursary/scholarship, why is that a bad thing for them?

My view is biased - that may be true but I stand by that students that work within the context of those of a similar academic background will perform better than if they didn't work in such an atmosphere.

Sure - I agree.

I'm pretty sure regulating salaries at different schools would be very very difficult to do. A higher salary isn't also a bribe. Simplistically, it works like this: better teachers (generally) mean that students do better in public exams, better exam grades means better universities, better universities and a 'stronger' career path and more chance for their students to have a good reputation and successful career - good for the school. Obviously then the school would want the best, on top of the fact that they are indeed the best.

Yeah politicians are a bit rubbish. I do kind of get why Starmer's donation acceptance is acceptable but not really given the things he's said. He's allowed to receive a donation without paying VAT, but I'm not?
Original post by SHallowvale
The last point could extend to parents as well. If their children had to use public schools then more pressure would be placed on the schools and politicians to make them better, whereas at the moment no such pressure would exist if they can simply transfer their children to a private school which is performing well.

A public school is another name for a fee-paying school in the UK - I presume you mean state school?
I'm sure - but if their parents can afford private education or they can get in on a bursary/scholarship, why is that a bad thing for them?
My view is biased - that may be true but I stand by that students that work within the context of those of a similar academic background will perform better than if they didn't work in such an atmosphere.
Sure - I agree.
I'm pretty sure regulating salaries at different schools would be very very difficult to do. A higher salary isn't also a bribe. Simplistically, it works like this: better teachers (generally) mean that students do better in public exams, better exam grades means better universities, better universities and a 'stronger' career path and more chance for their students to have a good reputation and successful career - good for the school. Obviously then the school would want the best, on top of the fact that they are indeed the best.
Yeah politicians are a bit rubbish. I do kind of get why Starmer's donation acceptance is acceptable but not really given the things he's said. He's allowed to receive a donation without paying VAT, but I'm not?

Fee-paing schools are no better than state schools.

Please reflect on what you are saying as it sounds very 'elitist' and entitled. I'm sure you don't meant to come over like that. Are you really saying some children are 'too good' for state schools?!
Reply 85
Original post by Muttley79
Fee-paing schools are no better than state schools.
Please reflect on what you are saying as it sounds very 'elitist' and entitled. I'm sure you don't meant to come over like that. Are you really saying some children are 'too good' for state schools?!

I'm saying that some children would excel more in schools that push them harder - these tend to be private schools.

Also, it is generally agreed that private schools have better resources available to them than state schools (and lots of private schools are selective whereas the majority of state ones aren't to a great extent) - from this I assumed that the quality of education is higher in private schools (generally) which is why adding VAT is even possibly a question.

Apologies for coming across as entitled - where did you get this impression so I can potentially edit it to make it more moderate.
(edited 1 week ago)
Ah ok I think you misunderstood me - sorry if I was unclear.

Zero government money is going towards private schools. In a theoretical situation where these schools didn't exist, the government would need to find a total of around 5bn pounds a year to educate these children (the government spends what you can assume is zero if private schools exist; parents spend this money). Without private schools, the government would be 5bn in debt (or there abouts). The money going into private schools to educate the 600000 is coming from parents or donations, which would never go to the government in any other way than tax. HOWEVER, the VAT will cause a spending increase of 2% in government schools - good - but I think that the repercussions on private education in particular, but also state education isn't a great idea; I'm biased too. What are your thoughts on the above?

I still support the tax in full, I want to see state schools and teaching standards improve. If scraping the tax break from private schools can help to do that (assuming that the government doesn’t misuse the money) then be it.

If the government will misuse the funds then forget it. Taxing private schools simply because it’s usually the more well off and/or a academically gifted (academically gifted pupil regardless of socioeconomic background) who tend to go there isn’t the right goal to have in my opinion. So I’m not a fan of the eat the rich/nerds attitude in this context but I am for improving state schools, hopefully getting to a point where going to a private school wouldn’t have that much benefits compared to going state (similar to how it seems to be at university level).
Reply 87
Original post by Talkative Toad
I still support the tax in full, I want to see state schools and teaching standards improve. If scraping the tax break from private schools can help to do that (assuming that the government doesn’t misuse the money) then be it.
If the government will misuse the funds then forget it. Taxing private schools simply because it’s usually the more well off and/or a academically gifted (academically gifted pupil regardless of socioeconomic background) who tend to go there isn’t the right goal to have in my opinion. So I’m not a fan of the eat the rich/nerds attitude in this context but I am for improving state schools, hopefully getting to a point where going to a private school wouldn’t have that much benefits compared to going state (similar to how it seems to be at university level).

Yeah that makes sense.

I must also add that I think before adding VAT, the first step should be making the money spent by the government into state education more efficient - what I mean by this is that heaps and heaps of money shouldn't be thrown at a couple of hundred schools but spread out more evenly. If by that point, more needs to be done, then maybe I'd change my stance on taxing private schools.
Yeah that makes sense.

I must also add that I think before adding VAT, the first step should be making the money spent by the government into state education more efficient - what I mean by this is that heaps and heaps of money shouldn't be thrown at a couple of hundred schools but spread out more evenly. If by that point, more needs to be done, then maybe I'd change my stance on taxing private schools.

Yeah we could do both, some state schools seem to have lots of money.
Reply 89
Original post by Talkative Toad
Yeah we could do both, some state schools seem to have lots of money.

Maybe, but if the quality of state education is improved, then wouldn't the VAT be counter-intuitive.
Maybe, but if the quality of state education is improved, then wouldn't the VAT be counter-intuitive.

Nope because the money coming from the VAT would be used on state schools.

At least that’s my take.
Original post by SHallowvale
Private schools have an incentive to keep costs down not out of the "goodness of their hearts" but because they're businesses that have to compete for customers, i.e. students. Parents will obviously gravitate towards the schools which return the best results at the lowest cost,


That’s exactly right. Private schools don’t keep fees low out of the goodness of their hearts. They keep them only as low as they need to in order to retain a certain number of customers - or equivalently, as high as they can get away with such that they don’t irreplaceably lose too many customers. (This is exactly what we mean by “equilibrium price”.) Adding VAT makes the fees even higher than that, meaning they actually will lose some customers and end up with fewer students thereafter.

but just because schools are charging £XX,XXX amount per year doesn't mean that the parents cannot (theoretically) afford more

To answer your final question, to me the latter is certainly controversial. In real terms, parents today are paying fees that are well over 20% (in some cases about 50% or even 80%) higher than the fees paid by parents before them (or in some cases the same parents). All this says to me is that these parents are capable of spending a lot more on private school fees than we think. I cannot see how a sudden 20% increase will lead to a long term reduction in enrollment when, in real terms, fees have already exceeded that.


I fully agree that most parents are capable of spending more on fees than they currently do. But your argument here makes no distinction between those who are capable and those who aren’t. It’s the latter group that the argument hinges on, i.e. the few customers that the school would lose if fees were to increase. And it only takes 2-3 children from a class of 20 falling into this category to render the VAT policy useless.

I don’t see why it is controversial to say that this is a realistic possibility. Just because fees have increased in the past without losing customers doesn’t imply that there’s even more room for them to increase now and still not lose these customers. Otherwise, if all or almost all parents were able and willing to pay a further 20% on top of what they already do, why wouldn’t schools have already been charging this extra 20% themselves?

The findings from think tanks or advisory firms need not be fabricated or the results of a conspiracy. They could simply be numerically incorrect or based on incorrect data. In the case of Aztec we have no way of knowing because they didn't publish their findings (hence they cannot be held to scrutiny) and in the case of Adam Smith they gave no explanation for why they went with 10%; they may well have had a good reason, but we don't know.


Sure, these analyses could be based on incorrect data, or contain errors, or be made up, or just pullled out of someone’s ****. They could be lots of things. But why assume that this is the case? The IFS analysis could also have lots of problems that we don’t know about. In fact it has one problem that we do know about: namely the quality of its data. So why should any of the sources that I provided be considered less credible than the findings of the IFS?

If your issue is simply that they haven’t published more of the details and methodologies behind their findings, here’s another source that has: https://www.bainescutler.com/media/2umbzz1c/isc-vat-full-report-1018-for-circulation.pdf
(edited 1 week ago)
Original post by Emma:-)
It sounds like a good idea in theory, but i dont think it will actually work in reality.

"i dont think it will actually work in reality."
Care to explain why?
Original post by imlikeahermit
All this policy does is make private schools more exclusive and for those with more money. There are countless stories of parents sacrificing everything within their wages to get their children into private school. That’s done now.

Yeah, it's awful that an exclusive luxury will no longer be affordable to some families in high income brackets.
What's the point of having taxpayers if we can't use them to subsidise privilege for the wealthy.
It's political correctness gone maaaad!
Original post by SHallowvale
I'm in favour of it, private school fees have risen above inflation for over a decade yet enrollment has remained constant. I do not see how an added 20% (assuming the school passes it on to the parents) would affect the vast majority of parents sending their children to private schools. Fees already cost £15,000 a year, I don't buy the argument that parents of privately educated children are somehow hard done by and struggling.

Indeed.
£15000 is at the lower end. Many are £20-30k a year. Assuming the standard two kids, that's a bare minimum of £30,000 a year in disposable income. It is a luxury and privilege far out of the reach of ordinary working families, many of whom have to manage on a total income of less than that.
Original post by tazarooni89
I think it's highly counterproductive.
People seem to have a stereotype in their minds of private school children being those who attend famous boarding schools like Eton and Harrow, whose fees are so high that 20% VAT would be a large sum that can hugely benefit the state sector, and whose parents are so rich that the extra fees wouldn't faze them. The reality is that this is a tiny minority. It underestimates the high proportion of children attending far cheaper private schools, whose parents can only just about afford to send them there, or who rely on scholarships and bursaries to be able to attend.
This means that as a result of VAT, many children who would have otherwise gone to a private school will instead go to a state school. It may not happen all at once with mass transfers from private to state, but in the long term, parents of new pupils joining primary or secondary school for the first time will inevitably be swayed more towards the state sector.
Many people will not see this as a problem: "I attended state school and turned out fine, what's the big deal if they do too?". But it is bad in several ways besides "poor Millie and Hugo having to go to state school with the commoners". For example:

It's bad for the taxpayer, who now has to foot the entire bill for their education (around £8k per year per pupil) without collecting any extra tax from them.

It's bad for existing state school pupils, who will face greater competition for places at their top choices of school (especially from pupils who can better afford things like private tuition and house prices in catchment areas)

It's also bad for existing state school pupils in the sense that their schools will get more overcrowded, with limited resources having to be spread more thinly across more pupils (e.g. real estate, one-on-one time with teachers)

It's bad for children who would have benefitted from specialist forms of education that are more readily available at private schools (e.g. special educational needs and disabilities, boarding for military families)

It's bad for children who suffer an interruption in their education by having to transfer from one school to another.


The only positive is that yes, the VAT results in some extra money being collected from those who remain in private schools (around £3k per year per pupil). But there are two issues: firstly, most of this gets eroded by the additional costs of educating more children at state school and outweighed by the additional disadvantages outlined above, and secondly there are far better ways of collecting this extra money in a way that doesn't result in a shock to the entire education system (e.g. increasing taxes for those who can easily afford to pay more tax).

"People seem to have a stereotype in their minds of private school children being those who attend famous boarding schools like Eton and Harrow"
No they don't. People just see the taxpayer subsidising an exclusive luxury like private education as unjustifiable in principle.
The evidence suggests that it will not have any significant impact on enrolment, so all the imagined "problems" fail to materialise.
Original post by Trinculo
Simply a symptom of the evils of socialism.
If someone is doing better, do everything you can to destroy it.
There is no benefit to this.

You seem confused. There is no proposal to ban private education. It is simply an entirely reasonable plan to remove state subsidy for an exclusive privilege enjoyed by the wealthy.
Next you'll be demanding no VAT on ponies, skiing holidays and Range Rovers.
Original post by LittleFire10
I don’t understand how anyone can see it as morally right to tax education. What about the SEND students who can’t be supported by state schools and whose parents are stretched to the limit affording to put them in state schools. What about those who aren’t “rich”, but whose parents have worked hard to put them in but now can’t. In all honesty, those who support this tax clearly have a completely biased, stereotypical view of private schools and are (maybe unconsciously) resentful. Why should parents who worked hard to make enough money to give their child a different education be snubbed for that?

The principle is quite simple. "Cut your clothes to suit your cloth".
If you can't afford a luxury item, you simply go for a more affordable option. It's not like the alternative is no education. And it's not like private schools are being abolished.
Why should the taxpayer (many of whom are struggling just to pay for essentials) subsidise a luxury for a small minority?
Original post by 2WheelGod
The principle is quite simple. "Cut your clothes to suit your cloth".
If you can't afford a luxury item, you simply go for a more affordable option. It's not like the alternative is no education. And it's not like private schools are being abolished.
Why should the taxpayer (many of whom are struggling just to pay for essentials) subsidise a luxury for a small minority?


There are 3 state schools and 1 private school in my area. In one of the state schools, all people of colour are referred to as “black kid 1” by the students. At the other, girls are touched inappropriately on a regular basis. At the third a kid died last year from having his vape spiked at school. The little money from tax will not fix that, but will make more students deal with that who haven’t before.
People can't just throw 10k at VAT for their 2 or 3 kids out of the blue. You act like that's insignificant money?

If a family has £50,000+ a year in disposable income, then they are already in a very small and exclusive income category.
If an increase in the price of something means they can no longer afford it, well, welcome to the real world! Adjust your finances accordingly rather than crying about how unfair everything is.

And it's hardly "out of the blue". Parents have had plenty of advance warning.

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