An analysis has revealed that Labour’s plan to charge VAT on private school fees may generate significantly less revenue than previously estimated. The Mail has the story.
Prior to the General Election, Sir Keir Starmer vowed to end tax breaks for private schools in order to fund a series of manifesto pledges.
This included the recruitment of 6,500 extra teachers in the state sector, among other measures such as providing 3,000 new nurseries.
The Institute for Fiscal Studies previously estimated that removing tax exemptions from private schools would raise about £1.6 billion a year in extra tax revenue.
But, according to the Sunday Times, research by HMRC in January showed – in the most extreme case – the policy would bring in far less. …
Data from the Independent Schools Council’s 2023 census found there were 554,316 pupils at private schools in the U.K., representing about 5.9% of all pupils.
Under their worst-case scenario, HMRC planned for 17% of private pupils, about 94,000, moving to state schools.
This would see the policy of removing tax exemptions for private schools raise just £650 million in extra revenue in 2025-26 because of the added cost of funding children in the state system.
In a second scenario, HMRC calculated that if 11% of pupils moved to state education, about 60,000, the policy would raise £900 million.
A 5% shift of privately educated pupils to the state sector, about 28,000 pupils, would raise £1.15 billion.
Worth reading in full.
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The most sensible way to row back out of this nonsense is to introduce the school voucher system as per Keith Joseph’s proposal to PM Thatcher in 1983.
Which
”entails radical changes in the law and some very difficult political choices… to give all parents financial power to choose a school and to bring about the greater diversity, improved efficiency and higher standards flowing from the exercise of that power”
Unfortunately the current government has no sense, only embedded ideological envy.
https://www.margaretthatcher.org/document/210728
They also haven’t thought the economics through, if Private schools have to charge VAT, why not convert to company status, the various allowances for purchasing capital goods etc, reclaiming VAT, should more than wipe out the VAT on fees losses, it won’t help the parents but it sure will leve a hole in Labour’s plans.
When I was at prep school in Scotland in the 60s, my school was part of The Girls School Company Limited. No charity then.
It’s a stupid, ill thought out, probably illegal, vindictive class warrior move that achieves precisely nothing. What is a billion anyway, it’s like spare change in the great scheme of things. We all know no new teachers will appear automagically or otherwise.
Class warfare.
All this adding vat on private schools is a nonsensical and pointless idea, but I’m more worried about what labour plan to teach in schools!
It’s far from pointless if the government objective is to undermine individual choice and boost the role of the state in people’s lives.
I agree about what they plan to teach in schools.
So not pointless but subversive then?
I’m glad I’m in the departure lounge and not arrivals
Yes me too
Perhaps you’re both coming back to experience the delights of the future education system. Make sure you hold onto that disdain for state control.
It might come sooner than that as I suppose there might be grandchildren in my future
I’ve already got primary age grandchildren and it scares me what future they may face
I might be asking you for tips when the time comes
Our kids” grandparents never tried to be backseat parents and we don’t want to do that either but I expect we will struggle to bite our tongues
Oh you will! I haven’t spoken to my son for over a year! He’s a millennial, a different race from us (wife included) and my parents, but I’m not the be all and end all of knowledge, we get on with the daughter in law and the grandkids and, for now, ignore my opinionated son!
I tried falling out with my kids over something that was really important to me and failed. Anyway, they are not opinionated, just more “go along to get along” than me and my Mrs.
look at Cambodia during Pol Pot, China under Mao, but with added lessons in how to please an Adult in ways which used to be confined to activities in films found in private shops, but all in the name of helping children to enjoy and understand adult bedroom activities from the age of 4.
Its a shame Jimmy Saville died as I am sure he would have been made a SPAD to the education department.