Fair point, would love to see the numbers on this. But it smells of trickle down economics to me. VAT is 20%, I assume this is what will be paid. And lets assume it is on the tuition that parents will now pay. Seems the average tuition paid is around £15k (rounded) for private schools. Which means about a 3k increase in the tuition. That would mean for every 3 students in a private school you could afford to send 1 to public school with room to spare. So to have a negative impact this policy would have to have a what 1 out of every 4 students to drop out of public school and return to private school? Or 25% of students give or take a lot.
But according to the article:
In October however, the ISC said some private schools reported a 4.6% drop in pupil attendance in secondary school uptake, which it attributed to parents now deciding against sending their children to private school.
Which is vastly less than 25% which should make this policy a net positive with loads of head room for my math crude back of the napkin attempt.
Thus, smells a lot like trickle down economics argument to me.
Would love to see a more concrete analysis of this.
It won’t be anything like a 20% uplift though as the schools will also be able to reclaim vat on purchases which they didn’t before. Obviously they are not advertising this point, but I’m surprised the right wing media haven’t been shouting about it this, they could just be that lazy though.
Well yes - theres nothing obviously wrong with your maths - and it’s not my position that this policy will be a net negative for the treasury. At least in the short term, the VAT will be paid, with parents or the schools eating the increase.
What I hoped to show, was that it’s not outlandish to argue for some VAT relief for parents paying schools fees, given that by not taking up a place in state they create a space in state school that is worth around £7000 per year to the government .
There remains plenty of precedent for VAT relief on children - there’s no VAT on books, no VAT on clothes, no VAT on baby food, I even think child care is free of VAT
But while that is technically true how would you form a policy around it? If you can afford to pay for private school but not the VAT have it VAT free? But if you can afford the VAT then you must pay it? That would be very hard to enforce and ripe for abuse. A blanket VAT/no VAT on private schools is far easier and overall will be a positive even if some more students will drop down to the state paying for their education.
And yeah, having VAT exception rules for stuff children need to buy, like books cloths food etc is good. But why is that good? Because it applies to everyone not just a select few people rich enough to buy the best books, designer cloths and luxury foods. And public schools are already VAT free - by virtue of being free. This is not a blanket tax on all education, just the luxury side of it which only the wealthy currently partake in.
Pointing out the £7000 cost without putting it into context seems like an argument a conservative would use against this policy - even though there is an overall net gain with it taken into account. Yes we should take it into account but so should we the amount of money brought in. And that is how we decide if it is a good policy or not (and it seems like it will be).
The only real concern here would be if the government implements the tax and does not give that back to the schools - which TBH is a real concern. Though even if it is neutral - the government paying for the extra students but not giving extra overall funds I would still say it is worth while as it is a form, even a small one, of tax on the rich. So long as it does not hurt the public schools (which the government would have not pay for the extra students for that to be true - I am not sure they would go that far).
This “I saved the government £7000 because I took my children out of the state sector so I deserve a tax break for my public-spirited benevolence” is so bogus.
No, it wasn’t public spirit, it was self interest. They reckon their kids will get a better education that can help them stay on the top of the socioeconomic pile and they won’t have to mix with the plebs. No tax break for that shit. It’s not good for society.
Fair point, would love to see the numbers on this. But it smells of trickle down economics to me. VAT is 20%, I assume this is what will be paid. And lets assume it is on the tuition that parents will now pay. Seems the average tuition paid is around £15k (rounded) for private schools. Which means about a 3k increase in the tuition. That would mean for every 3 students in a private school you could afford to send 1 to public school with room to spare. So to have a negative impact this policy would have to have a what 1 out of every 4 students to drop out of public school and return to private school? Or 25% of students give or take a lot.
But according to the article:
Which is vastly less than 25% which should make this policy a net positive with loads of head room for my math crude back of the napkin attempt.
Thus, smells a lot like trickle down economics argument to me.
Would love to see a more concrete analysis of this.
It won’t be anything like a 20% uplift though as the schools will also be able to reclaim vat on purchases which they didn’t before. Obviously they are not advertising this point, but I’m surprised the right wing media haven’t been shouting about it this, they could just be that lazy though.
Well yes - theres nothing obviously wrong with your maths - and it’s not my position that this policy will be a net negative for the treasury. At least in the short term, the VAT will be paid, with parents or the schools eating the increase.
What I hoped to show, was that it’s not outlandish to argue for some VAT relief for parents paying schools fees, given that by not taking up a place in state they create a space in state school that is worth around £7000 per year to the government . There remains plenty of precedent for VAT relief on children - there’s no VAT on books, no VAT on clothes, no VAT on baby food, I even think child care is free of VAT
But while that is technically true how would you form a policy around it? If you can afford to pay for private school but not the VAT have it VAT free? But if you can afford the VAT then you must pay it? That would be very hard to enforce and ripe for abuse. A blanket VAT/no VAT on private schools is far easier and overall will be a positive even if some more students will drop down to the state paying for their education.
And yeah, having VAT exception rules for stuff children need to buy, like books cloths food etc is good. But why is that good? Because it applies to everyone not just a select few people rich enough to buy the best books, designer cloths and luxury foods. And public schools are already VAT free - by virtue of being free. This is not a blanket tax on all education, just the luxury side of it which only the wealthy currently partake in.
Pointing out the £7000 cost without putting it into context seems like an argument a conservative would use against this policy - even though there is an overall net gain with it taken into account. Yes we should take it into account but so should we the amount of money brought in. And that is how we decide if it is a good policy or not (and it seems like it will be).
The only real concern here would be if the government implements the tax and does not give that back to the schools - which TBH is a real concern. Though even if it is neutral - the government paying for the extra students but not giving extra overall funds I would still say it is worth while as it is a form, even a small one, of tax on the rich. So long as it does not hurt the public schools (which the government would have not pay for the extra students for that to be true - I am not sure they would go that far).
This “I saved the government £7000 because I took my children out of the state sector so I deserve a tax break for my public-spirited benevolence” is so bogus.
No, it wasn’t public spirit, it was self interest. They reckon their kids will get a better education that can help them stay on the top of the socioeconomic pile and they won’t have to mix with the plebs. No tax break for that shit. It’s not good for society.