Private schools, times a changing?

[RammyMP]

We’ve had a letter from school asking us if we want to pay the fees in advance to avoid the VAT, I’m going to take them up on their offer.

Also, the wife’s a teacher, she’s desperate to get a job outside of education due to the nature of the job these days. Most of her colleagues are of the same opinion. Where are labour going to find 6500 extra teachers from? Clueless.

[s2kjock]

I'm not sure I'd be too comfortable paying such large amounts in advance to a sector that is struggling to some degree currently and likely to struggle even more if the VAT treatment does change.

[Louis Balfour]

s2kjock said:

I'm not sure I'd be too comfortable paying such large amounts in advance to a sector that is struggling to some degree currently and likely to struggle even more if the VAT treatment does change.

Me neither.

[M1AGM]

Louis Balfour said:

s2kjock said:

I'm not sure I'd be too comfortable paying such large amounts in advance to a sector that is struggling to some degree currently and likely to struggle even more if the VAT treatment does change.

Me neither.

I reluctantly agree too. Decided not to pay the last 2 years for my eldest up front because I cannot see it benefitting me at all, just more money lost in interest (1% discount offered). Vat will undoubtedly be due at the point of supply, not invoice.

I’m also thinking that hmrc will be hot on it because ‘rich’ people.

[Ascayman]

Our school has written a 10 page letter to Starmer highlighting just why this is so ridiculous and asked us all to send copies to our local mps.

It’s to long to post here and I don’t think you can post pdfs? Happy to share via email for anyone that’s interested though.

[RammyMP]

M1AGM said:

I reluctantly agree too. Decided not to pay the last 2 years for my eldest up front because I cannot see it benefitting me at all, just more money lost in interest (1% discount offered). Vat will undoubtedly be due at the point of supply, not invoice.

I’m also thinking that hmrc will be hot on it because ‘rich’ people.

HMRC aren’t hot on much at the moment but no doubt they’ll be instructed by Labour to take an interest.

I’m not rich by any account but if it’s going to save me a few thousand to pay in one instalment instead of three then I’ll take it. My youngest has one year left at school so to me it’s not a massive risk, I wouldn’t have been happy paying a few years up front for both kids!

[TUS373]

I've paid up front for one year which is final year of A levels. It's been a pain redoing my finances but whichever way I look at it...it makes great sense. Money in the bank earns little interest and even a 1 year loan has a much lower % than paying VAT. Still...its cost money.

I'm happy to risk it with 1 year. The school should be financially stable, even more so if parents do pay up front. I want to support the school that has supported my child for the last 14 years.

It's a further shame that Labour want to put schools under more stress. Thinking back to 2020 when they restructured education in a matter of days and weeks to continue to educate kids during Covid. It was a remarkable effort due to an out control virus. Labour are now forcing another heap of stress on to schools, when they need not. It completely boils my micturition.

Labour campaigners came around to us on Sunday. I politely voiced my point of view on the VAT and they gave no defence other than 'hmmm...it will be quite difficult '.

I will judge a party entirely on its behaviour around inventing a policy like this. It is an extremely stupid idea. How many more are there? And the leaflets they have sent me itemise lots of things that Starmer is planning....but omit to mention that they will make parents of some kids pay an extra 20% for their schooling.

Edited by TUS373 on Wednesday 26th June 23:55

[pork911]

Ascayman said:

Our school has written a 10 page letter to Starmer highlighting just why this is so ridiculous and asked us all to send copies to our local mps.

It’s to long to post here and I don’t think you can post pdfs? Happy to share via email for anyone that’s interested though.

Where else are you opposing vat?


Anyway, do the pre-payers here really think they will avoid?

[okgo]

I haven’t bothered yet, have the option to and school has significant enough wealth that I doubt it’s going anywhere but it isn’t a shoe in that the school will pass 20% on anyway.

There is a small discount for paying up front - 4% - so suspect it does make sense ultimately.

[MadCaptainJack]

What are the chances that a bunch of pissed-off parents who happen to be lawyers mount some kind of Gina Miller-style legal challenge?

[NDA]

pork911 said:

Ascayman said:

Our school has written a 10 page letter to Starmer highlighting just why this is so ridiculous and asked us all to send copies to our local mps.

It’s to long to post here and I don’t think you can post pdfs? Happy to share via email for anyone that’s interested though.

Where else are you opposing vat?

Just education I imagine.

[birdcage]

This is my school, keen to still apply increase in fees retrospectively..And they are sitting on the fence..

Dear Parents

Several of you have contacted us in recent days with queries relating to next year's fees and ways to pay them.

We have a Fees in Advance scheme, which some parents choose to use and the terms for the scheme have recently been updated and are attached. Some of the key points to note about the scheme are:

The advance payment discount is variable and is currently set at 2%
Fee increases will still be applied and a balancing invoice would be issued each term where applicable
Any changes to tax or duty imposed on the School will be applied accordingly
It remains unclear what the tax implications on such advance payments will be, should Labour implement their proposed taxation policies on independent school fees, and we will of course comply fully with HMRC rules as they may be applied. We recommend seeking independent financial advice as part of your decision process.

As a school we have been preparing for a possible introduction of VAT on fees and abolition of business rates relief by reviewing every aspect of our cost base and pursuing alternative income streams to reduce our dependence on fee income. We are very aware of the concern that Labour's manifesto pledges on independent schools will be causing you and other families across the country. However, as there is still limited detail on how the new arrangements would be implemented, we aren't able to share definitive plans with you now and will await the result of the General Election and the details that are revealed thereafter. We do of course remain a charitable foundation focused on providing the highest quality education.

As we come to the end of term, I would like to raise a few other points relating to fees:

Your recharges for the summer term have historically been added to your invoice for the Michaelmas term fees, issued in the summer. This adds some complication for the end of our financial year which is 31st August. Therefore, we will be issuing an invoice straight after the end of term for all summer term recharges. The Michaelmas fees invoice will be issued over the summer for payment to be made at the start of term in September.
We have always been flexible in how parents can pay fees, and if you would like to pay next year’s fees in full prior to the end of this term please email by Friday 28th June and an invoice will be issued.
We are introducing ParentPay shortly which will enable us to switch from retrospective recharges to an online system where you can pay as items arise. This is particularly effective for trips and lunches. Fees will still be invoiced in the usual way, and paid by direct debit or bank transfer. More information will be sent shortly.

[Vixpy1]

MadCaptainJack said:

What are the chances that a bunch of pissed-off parents who happen to be lawyers mount some kind of Gina Miller-style legal challenge?

I would think there will be many legal challenges, its not a section of society you want to ps off

[Tom8]

Will we end up with funny schemes to avoid it? I like the idea of schools becoming membership clubs, to be a member you have to buy a blazer for £15k and your fees are "free" and no VAT as it is school uniform which is exempt.

[EmBe]

Tom8 said:

Will we end up with funny schemes to avoid it? I like the idea of schools becoming membership clubs, to be a member you have to buy a blazer for £15k and your fees are "free" and no VAT as it is school uniform which is exempt.

Anything 'clever' like that will be classed as a loophole and closed quickly.
To make this go away for good a legal challenge needs to happen, probably along the lines of forcing the government to charge VAT on all education which would then prompt a quick about face. In fact I wouldn't be surprised if the announcement to delay the scheme to 2025 was in response to the knowledge of a school/group of schools threatening just such a move.

[Sway]

EmBe said:

Tom8 said:

Will we end up with funny schemes to avoid it? I like the idea of schools becoming membership clubs, to be a member you have to buy a blazer for £15k and your fees are "free" and no VAT as it is school uniform which is exempt.

Anything 'clever' like that will be classed as a loophole and closed quickly.
To make this go away for good a legal challenge needs to happen, probably along the lines of forcing the government to charge VAT on all education which would then prompt a quick about face. In fact I wouldn't be surprised if the announcement to delay the scheme to 2025 was in response to the knowledge of a school/group of schools threatening just such a move.

The legislation to enact VAT solely on public schools is going to be very complex. There's a whole plethora of 'fee paying education establishments', and Labour are going to have to work quite hard in coming up with the specific criteria that only hits Eton and not Middlesborough Uni, or a charity providing training courses.

[ClaphamGT3]

Sway said:

EmBe said:

Tom8 said:

Will we end up with funny schemes to avoid it? I like the idea of schools becoming membership clubs, to be a member you have to buy a blazer for £15k and your fees are "free" and no VAT as it is school uniform which is exempt.

Anything 'clever' like that will be classed as a loophole and closed quickly.
To make this go away for good a legal challenge needs to happen, probably along the lines of forcing the government to charge VAT on all education which would then prompt a quick about face. In fact I wouldn't be surprised if the announcement to delay the scheme to 2025 was in response to the knowledge of a school/group of schools threatening just such a move.

The legislation to enact VAT solely on public schools is going to be very complex. There's a whole plethora of 'fee paying education establishments', and Labour are going to have to work quite hard in coming up with the specific criteria that only hits Eton and not Middlesborough Uni, or a charity providing training courses.

I think this is why Reeves is already having to come clean about the fact that they won't get this off the ground until September 2025 at the earliest.

The other obvious challenge is going to be around the (very few) private schools in NI. They are going to have to be VAT-exempt so as not to jeopardise the NI relationship with the EU &, therefore, the Good Friday agreement. Someone (HMC if nobody else) is going to challenge on the application of VAT regulations differently in different parts of the UK

[Tom8]

ClaphamGT3 said:

Sway said:

EmBe said:

Tom8 said:

Will we end up with funny schemes to avoid it? I like the idea of schools becoming membership clubs, to be a member you have to buy a blazer for £15k and your fees are "free" and no VAT as it is school uniform which is exempt.

Anything 'clever' like that will be classed as a loophole and closed quickly.
To make this go away for good a legal challenge needs to happen, probably along the lines of forcing the government to charge VAT on all education which would then prompt a quick about face. In fact I wouldn't be surprised if the announcement to delay the scheme to 2025 was in response to the knowledge of a school/group of schools threatening just such a move.

The legislation to enact VAT solely on public schools is going to be very complex. There's a whole plethora of 'fee paying education establishments', and Labour are going to have to work quite hard in coming up with the specific criteria that only hits Eton and not Middlesborough Uni, or a charity providing training courses.

I think this is why Reeves is already having to come clean about the fact that they won't get this off the ground until September 2025 at the earliest.

The other obvious challenge is going to be around the (very few) private schools in NI. They are going to have to be VAT-exempt so as not to jeopardise the NI relationship with the EU &, therefore, the Good Friday agreement. Someone (HMC if nobody else) is going to challenge on the application of VAT regulations differently in different parts of the UK

You just know it was a Rayner/Corbyn envy idea and Kier just went, yeah ok and didn't think about it. Then when the people with more than single digit brain cells have to look at it it becomes difficult.

[Spare tyre]

Tom8 said:

Will we end up with funny schemes to avoid it? I like the idea of schools becoming membership clubs, to be a member you have to buy a blazer for £15k and your fees are "free" and no VAT as it is school uniform which is exempt.

Will make for very expensive goal posts!

Joking aside a few of my work mates send their kids to private school, it’s caused a lot of upset and frantic changing of plans such as moving house etc

[Swervin_Mervin]

ClaphamGT3 said:

Sway said:

EmBe said:

Tom8 said:

Will we end up with funny schemes to avoid it? I like the idea of schools becoming membership clubs, to be a member you have to buy a blazer for £15k and your fees are "free" and no VAT as it is school uniform which is exempt.

Anything 'clever' like that will be classed as a loophole and closed quickly.
To make this go away for good a legal challenge needs to happen, probably along the lines of forcing the government to charge VAT on all education which would then prompt a quick about face. In fact I wouldn't be surprised if the announcement to delay the scheme to 2025 was in response to the knowledge of a school/group of schools threatening just such a move.

The legislation to enact VAT solely on public schools is going to be very complex. There's a whole plethora of 'fee paying education establishments', and Labour are going to have to work quite hard in coming up with the specific criteria that only hits Eton and not Middlesborough Uni, or a charity providing training courses.

I think this is why Reeves is already having to come clean about the fact that they won't get this off the ground until September 2025 at the earliest.

The other obvious challenge is going to be around the (very few) private schools in NI. They are going to have to be VAT-exempt so as not to jeopardise the NI relationship with the EU &, therefore, the Good Friday agreement. Someone (HMC if nobody else) is going to challenge on the application of VAT regulations differently in different parts of the UK

And that's before you even start on Labour wanting closer ties with the EU...