Private schools, times a changing?

[Sheepshanks]

ClaphamGT3 said:

Capital investment, energy, building maintenance, transport & vehicles, agency and supply staff to name a few.

Well, looking at a couple of sets of accounts, the majority (vast majority in one case) is staff costs.

Wouldn't a school with charitable status get energy at 5% VAT? And capital investment could be zero rated.

[Shaoxter]

Checked the accounts for my son's school, only 25% of the expenditure is classed under "Premises" which will be a mix of capex and day to day running costs. The rest is all staff related so I doubt they'll be able to get anywhere near a 5-7% effective rate of VAT.

[Hedgedhog]

ClaphamGT3 said:

I would imagine that a lot of schools will be getting a lot of tax advice at the moment. I have heard of schools that believe that, by the time that they have passed on VAT reclaim savings to fee payers as fee reduction, the effective rate of VAT will be something like 5 - 7%

I don't know whether other parents have had these conversations but speaking to the Bursar of my kids school they already have a scheme to pay school fees in advance. If parents are able to do so then they would not be liable for any VAT introduced in the future.

Another unintended consequence of this change that I'm not sure has been mentioned in this thread is the potential withdrawal of the provision/sharing of school facilities with the local community, clubs and schools. My local private school has Olympic standard running track and gym facilities that are made available to the local community/clubs, sometimes to the detriment of the kids attending the school. Going forward will parents paying the bills be so supportive of the school sharing their facilities so widely?

[Tom8]

Hedgedhog said:

ClaphamGT3 said:

I would imagine that a lot of schools will be getting a lot of tax advice at the moment. I have heard of schools that believe that, by the time that they have passed on VAT reclaim savings to fee payers as fee reduction, the effective rate of VAT will be something like 5 - 7%

I don't know whether other parents have had these conversations but speaking to the Bursar of my kids school they already have a scheme to pay school fees in advance. If parents are able to do so then they would not be liable for any VAT introduced in the future.

Another unintended consequence of this change that I'm not sure has been mentioned in this thread is the potential withdrawal of the provision/sharing of school facilities with the local community, clubs and schools. My local private school has Olympic standard running track and gym facilities that are made available to the local community/clubs, sometimes to the detriment of the kids attending the school. Going forward will parents paying the bills be so supportive of the school sharing their facilities so widely?

I think there is meant to be some form of block to paying in advance. Our school is looking at this but not sure it will be permitted. Re facilities, yes exactly that, the sharing will stop and fees will be applied. Schools will operate as businesses, charging out for sports halls, pools etc to generate an income to offset some VAT. Spite envy policy where no one benefits, in fact quite the opposite and in the long term the country will be impacted.

[Hedgedhog]

Tom8 said:

I think there is meant to be some form of block to paying in advance. Our school is looking at this but not sure it will be permitted.

Given that the wording of the proposed legislation is unknown I'm not sure how any payment made in advance can be blocked. It would be incredibly petty to back date the VAT introduction to cover pre payments if indeed that would be legally possible but this is certainly not my area.

[Tom8]

Hedgedhog said:

Tom8 said:

I think there is meant to be some form of block to paying in advance. Our school is looking at this but not sure it will be permitted.

Given that the wording of the proposed legislation is unknown I'm not sure how any payment made in advance can be blocked. It would be incredibly petty to back date the VAT introduction to cover pre payments if indeed that would be legally possible but this is certainly not my area.

I am not sure just what I have heard. I think it might link to why you can't pay school fees in monthly instalments, they can't operate like a bank or lending/credit body.

[ettore]

Hedgedhog said:

Tom8 said:

I think there is meant to be some form of block to paying in advance. Our school is looking at this but not sure it will be permitted.

Given that the wording of the proposed legislation is unknown I'm not sure how any payment made in advance can be blocked. It would be incredibly petty to back date the VAT introduction to cover pre payments if indeed that would be legally possible but this is certainly not my area.

They can do it, and there is precedence. VAT will still be due from the point its implemented, even if you've pre-paid. They've been quite explicit about this already.

Luckily, I have one offspring away and at University but I'll have a couple of years of VAT with my younger - interestingly, there has been nil communication from his school, so I guess they're confident we'll all lap it up.

[Zigster]

That’s my understanding too: there is going to be something about VAT applying when the service is provided rather than when the fees were paid. I don’t know how that will work in practice given that I know parents who paid a big lump sum several years ago, well before the current discussion about VAT on school fees was mooted.

With the bigger picture about VAT on school fees, I suspect there will be a lot of unintended consequences.
The impact won’t be uniform: parents paying Eton’s fees are unlikely to be too bothered about a bit more on the fees and there will be plenty of other wealthy parents there to take the places of any who are.
Parents at the lower end of the range (local, private day school charging £10k pa) are likely to be a lot more fee sensitive. Some of those will lose a lot of pupils, potentially to the point of going bust. So in local markets, there could be quite a big increase in the number of State school pupils. In my area, the State schools are already massively oversubscribed (part of the reason my children have been privately educated). It would also be a step-change in the numbers of pupils, rather than something which could be offset by declining numbers over time (demographics).
Those parents now going State will have potentially six figure sums now which they can use on buying a house in a catchment area of a good school, plus lots of top-up tutoring which will continue the gap between children of wealthy parents and those from more financially-limited backgrounds. So then we’ll get the middle class (but not that wealthy) parents up in arms when they find out they are no longer in the catchment area, which will lead to some fudging of school priority entries meaning more kids ferried back and forth across town contributing even more to the rush hour traffic.
Parents whose children are towards the end of their private schooling might dig deep to keep going for those last few years. But what about those with pre-schoolers or very early years of private education - the uncertainty might well make them think again about committing to 15+ years of ever higher fees. Particularly in light of the wider cost of living crisis (house prices, mortgages, etc). So the longer term impact is likely to be a lot more than the short-term.

A less obvious point is that private education is quite a big export: the good boarding schools have a lot of international pupils. Will more of them start attending overseas offshoots (my children’s school already has an international “family” of schools)? I think that would be a shame as the international wealthy attending top UK schools probably contributed to our “soft power”, such as remains.

[Hereward]

Zigster said:

...A less obvious point is that private education is quite a big export: the good boarding schools have a lot of international pupils. Will more of them start attending overseas offshoots (my children’s school already has an international “family” of schools)? I think that would be a shame as the international wealthy attending top UK schools probably contributed to our “soft power”, such as remains.

I wonder if overseas parents can reclaim / be exempt from the VAT. If not then yes, the international branch of the school or, say, the Swiss schools may become more favourable.

Could one also set up a foreign company to pay the school fees in order to recover the VAT element?

[Tom8]

Zigster said:

That’s my understanding too: there is going to be something about VAT applying when the service is provided rather than when the fees were paid. I don’t know how that will work in practice given that I know parents who paid a big lump sum several years ago, well before the current discussion about VAT on school fees was mooted.

With the bigger picture about VAT on school fees, I suspect there will be a lot of unintended consequences.
The impact won’t be uniform: parents paying Eton’s fees are unlikely to be too bothered about a bit more on the fees and there will be plenty of other wealthy parents there to take the places of any who are.
Parents at the lower end of the range (local, private day school charging £10k pa) are likely to be a lot more fee sensitive. Some of those will lose a lot of pupils, potentially to the point of going bust. So in local markets, there could be quite a big increase in the number of State school pupils. In my area, the State schools are already massively oversubscribed (part of the reason my children have been privately educated). It would also be a step-change in the numbers of pupils, rather than something which could be offset by declining numbers over time (demographics).
Those parents now going State will have potentially six figure sums now which they can use on buying a house in a catchment area of a good school, plus lots of top-up tutoring which will continue the gap between children of wealthy parents and those from more financially-limited backgrounds. So then we’ll get the middle class (but not that wealthy) parents up in arms when they find out they are no longer in the catchment area, which will lead to some fudging of school priority entries meaning more kids ferried back and forth across town contributing even more to the rush hour traffic.
Parents whose children are towards the end of their private schooling might dig deep to keep going for those last few years. But what about those with pre-schoolers or very early years of private education - the uncertainty might well make them think again about committing to 15+ years of ever higher fees. Particularly in light of the wider cost of living crisis (house prices, mortgages, etc). So the longer term impact is likely to be a lot more than the short-term.

A less obvious point is that private education is quite a big export: the good boarding schools have a lot of international pupils. Will more of them start attending overseas offshoots (my children’s school already has an international “family” of schools)? I think that would be a shame as the international wealthy attending top UK schools probably contributed to our “soft power”, such as remains.

That misconception again that these parents are Alan Sugar. I have a friend whose son is at Harrow. He will have to remove him if 20% is applied and he is not alone.

[cheesejunkie]

Tom8 said:

That misconception again that these parents are Alan Sugar. I have a friend whose son is at Harrow. He will have to remove him if 20% is applied and he is not alone.

Boo fking hoo.

I'm as popular as a fart in a space suit on this thread but if you support segregated education don't complain when it becomes unaffordable. You supported it when it was for you.

I do feel sympathy, I really do, but not for those without a sense of irony.

[Tom8]

cheesejunkie said:

Tom8 said:

That misconception again that these parents are Alan Sugar. I have a friend whose son is at Harrow. He will have to remove him if 20% is applied and he is not alone.

Boo fking hoo.

I'm as popular as a fart in a space suit on this thread but if you support segregated education don't complain when it becomes unaffordable. You supported it when it was for you.

I do feel sympathy, I really do, but not for those without a sense of irony.

You are so kind hearted towards children. You should get a job at the BBC.

[dukeboy749r]

cheesejunkie said:

Tom8 said:

That misconception again that these parents are Alan Sugar. I have a friend whose son is at Harrow. He will have to remove him if 20% is applied and he is not alone.

Boo fking hoo.

I'm as popular as a fart in a space suit on this thread but if you support segregated education don't complain when it becomes unaffordable. You supported it when it was for you.

I do feel sympathy, I really do, but not for those without a sense of irony.

You miss the wider point, whether deliberately or not.

These parents, myself included, fund a private school place for a child (or children) yet I and everyone else, also fund public schools by virtue of the taxes we pay.

Are you of the same mind for those who have private healthcare insurance?

Or can afford 'better cars'?

[Ken_Code]

Tom8 said:

You are so kind hearted towards children. You should get a job at the BBC.

The child who can’t afford to go to Harrow any more will be accommodated in a state school, where millions of other children go.

Saying that not worrying too much about this shows a lack of sympathy doesn’t really make much sense. They aren’t being sent down a coal mine.

[Tom8]

dukeboy749r said:

cheesejunkie said:

Tom8 said:

That misconception again that these parents are Alan Sugar. I have a friend whose son is at Harrow. He will have to remove him if 20% is applied and he is not alone.

Boo fking hoo.

I'm as popular as a fart in a space suit on this thread but if you support segregated education don't complain when it becomes unaffordable. You supported it when it was for you.

I do feel sympathy, I really do, but not for those without a sense of irony.

You miss the wider point, whether deliberately or not.

These parents, myself included, fund a private school place for a child (or children) yet I and everyone else, also fund public schools by virtue of the taxes we pay.

Are you of the same mind for those who have private healthcare insurance?

Or can afford 'better cars'?

Not to mention hating everyone at grammar schools and anyone who has chosen to try and improve their own or their children's lot rather than rely on a failed satate system they also pay for (more than everyone else). Such a bitter life must be quite hard work.

[cheesejunkie]

dukeboy749r said:

cheesejunkie said:

Tom8 said:

That misconception again that these parents are Alan Sugar. I have a friend whose son is at Harrow. He will have to remove him if 20% is applied and he is not alone.

Boo fking hoo.

I'm as popular as a fart in a space suit on this thread but if you support segregated education don't complain when it becomes unaffordable. You supported it when it was for you.

I do feel sympathy, I really do, but not for those without a sense of irony.

You miss the wider point, whether deliberately or not.

These parents, myself included, fund a private school place for a child (or children) yet I and everyone else, also fund public schools by virtue of the taxes we pay.

Are you of the same mind for those who have private healthcare insurance?

Or can afford 'better cars'?

Yes I understand the wider point. I don't miss it deliberately. It doesn't make you a bad person, it's a natural way to be to look after your own.

If someone's going to suffer the ignominy of having to go to a cheaper school than Harrow I'll not shed any tears. Do you think I should? Or do you think I should question why they supported paid for privilege in the first place and got annoyed when they could no longer afford it?

[cheesejunkie]

Tom8 said:

Not to mention hating everyone at grammar schools and anyone who has chosen to try and improve their own or their children's lot rather than rely on a failed satate system they also pay for (more than everyone else). Such a bitter life must be quite hard work.

I went to a grammar school.

People being able to buy their way into education is the reason the state fails many more.

I'm not bitter. I post with a smile.

[turbobloke]

cheesejunkie said:

Tom8 said:

Not to mention hating everyone at grammar schools and anyone who has chosen to try and improve their own or their children's lot rather than rely on a failed satate system they also pay for (more than everyone else). Such a bitter life must be quite hard work.

I went to a grammar school.

People being able to buy their way into education is the reason the state fails many more.

I'm not bitter. I post with a smile.

Is that due to independent schools attracting the best teachers? Some will be tempted but many remain doing a great job in state schools.

Otherwise, how does saving the state from paying to educate even more children, while still making tax contributions towards that cost, actually harm the state system?

[cheesejunkie]

turbobloke said:

Is that due to independent schools attracting the best teachers? Some will be tempted but many remain doing a great job in state schools.

Otherwise, how does saving the state from paying to educate even more children, while still making tax contributions towards that cost, actually harm the state system?

I pay lots of taxes that I don't get a return on. I don't agree with your starting premise that it should be a zero sum game.

Private school payers are not saving the state. They're abusing the state. As evidenced by tax advantages that they're whinging about .

Look. I've made a name for myself on this thread as some sort of hater of people who pay for private education. I don't hate. I do think they're hypocrites if they claim they're doing it for the public good. That's not a difficult position to defend but have a go at me if you want. But I'm not out to get them, the world will keep turning and someone won't be able to afford Harrow, who gives a fk? Complaining about harrow becoming unaffordable whilst other people have real problems, that I give a fk about.

[ettore]

Ok pal, you’ve made your point plenty of times now. No need to get in the way of us poor sods who are paying - you’re getting in the way of our grumbling.