Charitable status and private schools

In fact, it is probably not the fault of the school but of nature or nurture.

ronib

Dinahmo seems to me that Eton doesn’t need to charge fees - it has a mountain of reserves. Not many private schools are in such a privileged position. Again Labour is pulling up the ladder….
Eton has produced some real oddities and I fail to see why anyone would think it’s a good school.

Most schools produce some oddities, even bog-standard comprehensives.

ronib

Dinahmo seems to me that Eton doesn’t need to charge fees - it has a mountain of reserves. Not many private schools are in such a privileged position. Again Labour is pulling up the ladder….
Eton has produced some real oddities and I fail to see why anyone would think it’s a good school.

I was answering your post at 12:58:21 re VAT. I chose Eton as an example because I doubted whether I'd easily find the financial statements of other private/public schools on line. I mentioned where I obtained the figures so that you or anyone else reading my earlier comment could check them.

Dinahmo seems to me that Eton doesn’t need to charge fees - it has a mountain of reserves. Not many private schools are in such a privileged position. Again Labour is pulling up the ladder….
Eton has produced some real oddities and I fail to see why anyone would think it’s a good school.

Otherwise, there is consensus among most of the 'leftish' posters that you seem to be ignoring.
Soooo sorry! I didn’t know I get told what I’m allowed to post about.

And every time this subject comes up
(I scrolled back through the subject arising and you could do the same), suggestions arrive that removing parental choice to pay for their children’s education will improve state education.
I have yet to see any rational proof that that would happen. I didn’t notice any such proof appearing.

I’ve not mentioned ‘charitable status’. Evidently even KS thinks that’s a hot potato that would lose him votes, or even donors.

Profit has no connection to VAT. If a school wishes to maintain its charitable status by avoiding making a profit then it can do so in a variety of ways, such as more bursaries to poor children or hiring more teachers. Not everything is subject to VAT and so the VAT surplus would not be affected.

Of course they could reduce their fees to reduce the total output tax charged to parents but would at the same time reduce the amount available to spend on capital expenditure.

I had a look at Eton College's financial statements for 2021/22. In that year the gross fees were £59,086,000 and expenditure on premises was £30,470,000. Expenditure on fixed assets was net construction costs £7,450,000 and plant and equipment £464,000. That's about £20 million difference between outputs and input subject to VAT - about £4 million to the Treasury. There's insufficient information to break the figures down further.

Mollygo

MaizieD

Every time this discussion comes up, and it does regularly, whether it’s to do with government changes or not, it makes a point that removing private schools would automatically improve state schools.

Where has anyone, apart from the odd poster, actually said that, Mollygo?

Do odd posters not count?

Not really, IMO. But if you think they do, perhaps you should address them personally.

Otherwise, there is consensus among most of the 'leftish' posters that you seem to be ignoring.

MaizieD

^Every time this discussion comes up, and it does regularly, whether it’s to do with government changes or not, it makes a point that removing private schools would automatically improve state schools.^

Where has anyone, apart from the odd poster, actually said that, Mollygo?

Do odd posters not count?

Mollygo

GSM
Any attempts to remove people’s choice to send their children to independent schools if they so wish are nothing to do with having ‘a fairer society’. It’s a case of ‘if I can’t afford it I’ll make sure you can’t have it’.

Sadly, that’s true.

Every time this discussion comes up, and it does regularly, whether it’s to do with government changes or not, it makes a point that removing private schools would automatically improve state schools.

I’ve yet to see any rational proof that this would happen.

I’m all in favour of any government who will improve all state schools so that improvements in state schools don’t just happen in places where the better off parents send their children. Or where extra equipment isn’t more frequently seen in schools where the PTA is supported by more affluent parents in the state system.

Taking away, the choice of sending your children to private schools wouldn’t do that.

Do those parents who send their children to private schools already pay tax on their income, which goes to pay for state education?
Is the suggestion that they should pay tax to put their children into the state system which would be catering for even more children?

Freedom of choice sometimes makes life unfair e.g.
having the right to have a holiday home in popular tourist places that you chose to buy with your hard earned money on, which swallows up housing for people who can’t even afford one home near where they work.
Where should the freedom of choice stop?

Excellent Post.

We choose fee based Religious education.

That is a choice.

What to spend excess hard earned money on as one sees fit.

Every time this discussion comes up, and it does regularly, whether it’s to do with government changes or not, it makes a point that removing private schools would automatically improve state schools.

Where has anyone, apart from the odd poster, actually said that, Mollygo?

MayBee70

How can an institution that enables the richest people in the country to achieve a better education for their children than the poorest be a charity?

Well, MayBee, if you look back over this thread posters have set out ways that the schools which are charities observe the letter of the law.

But it's ironic, isn't it, that the most prestigious of the charity schools, Eton, did start, hundreds of years ago, as a genuine charity school, to educate children of the poor. It only started taking fee paying pupils to make ends meet. I suppose that original endowments lost so much value over the centuries that the school couldn't exist without the fees. It would be interesting to know how much the original endowments were and what conditions were attached to them.

My OH went to Christs Hospital, another ancient charity school. He got there by way of a scholarship but many of the pupils were fee paying. But there was an income limit over which pupils couldn't, in theory, be accepted. Though I believe that exceptions were made for the sons of former pupils... The Old Blues that I met years ago were rarely from 'poor' families.

GSM
Any attempts to remove people’s choice to send their children to independent schools if they so wish are nothing to do with having ‘a fairer society’. It’s a case of ‘if I can’t afford it I’ll make sure you can’t have it’.

Sadly, that’s true.

Every time this discussion comes up, and it does regularly, whether it’s to do with government changes or not, it makes a point that removing private schools would automatically improve state schools.

I’ve yet to see any rational proof that this would happen.

I’m all in favour of any government who will improve all state schools so that improvements in state schools don’t just happen in places where the better off parents send their children. Or where extra equipment isn’t more frequently seen in schools where the PTA is supported by more affluent parents in the state system.

Taking away, the choice of sending your children to private schools wouldn’t do that.

Do those parents who send their children to private schools already pay tax on their income, which goes to pay for state education?
Is the suggestion that they should pay tax to put their children into the state system which would be catering for even more children?


Freedom of choice sometimes makes life unfair e.g.
having the right to have a holiday home in popular tourist places that you chose to buy with your hard earned money on, which swallows up housing for people who can’t even afford one home near where they work.
Where should the freedom of choice stop?

Ask Keir MayBee70

How can an institution that enables the richest people in the country to achieve a better education for their children than the poorest be a charity?

Dinahmo presumably private schools may reduce fees overall if total costs fall due to VAT repayments on capital expenditure, energy etc? Not forgetting that to maintain charitable status, a profit is not returned. Also remembering that Labour is allowing charitable status to remain. Bit of an own goal potentially ……

Casdon

Germanshepherdsmum

They have a great deal in common.

To the same extent as the Tory Party do with fascism. There are extreme elements in the political system.

Exactly.

Who exactly are you accusing of not wanting one person to be better off than any one else GSM? That's would be the epitome of extremism. There are only a small proportion of extremists in any direction and I have never heard anyone say such a thing on GN.

I would guess most people might think the growth in inequality, encouraged and facilitated by this now teenage government, could do with pulling back but that is nothing to do with choices in education.

Why do you keep telling us about your education? What does that prove? Do you think somebody tells more of the truth if they went to an independent school or if they went to a state school or if they went to both? I really can't see how it makes any difference. You hold the opinion you hold for many and varied reasons.

Germanshepherdsmum

They have a great deal in common.

To the same extent as the Tory Party do with fascism. There are extreme elements in the political system.

They have a great deal in common.

Germanshepherdsmum

Levelling the playing field (or anything) has everything to do with not allowing anyone to be better off than the next person, regardless of effort. The aim of many in the Labour Party.

No. That’s communism. The Labour Party is not the Communist party.

Levelling the playing field (or anything) has everything to do with not allowing anyone to be better off than the next person, regardless of effort. The aim of many in the Labour Party.

We can’t allow anyone to be better off than the next person can we, even if their parents have worked themselves into an early grave to give them some perceived advantage.

What a ridiculous statement, GSM. I'm surprised that anyone of your intelligence can make it.

Levelling the playing field between state and private education has nothing to do with not allowing people to be better off. If anything, it's trying to relieve people of the necessity of working themselves into an early grave...

Not that the posters who've told us on here that they worked to pay for private education for their children seem to have worked themselves into an early grave...

pennyhapenny

"In 2022–23, average private school fees across the UK were £15,200 in today’s prices (net of bursaries and scholarships). This is £7,200 or nearly 90% higher than state school spending per pupil, which was £8,000 in 2022–23 (including day-to-day and capital spending). The gap between private school fees and state school spending per pupil has more than doubled since 2010, when the gap was about 40% or £3,500."

Please correct my maths if I'm wrong...
x goes to private school and their parents pay £15,200 per year. x's parents save the taxpayer £8000 per year for state education.
Labour put VAT on private school fees and x's parents can no longer afford to pay the fees. x now has to go to a state school at a cost to the taxpayer of £8000 per year. The treasury will not be in receipt of any VAT payments from x's parents.
Extra cost to the taxpayer £8000.
In addition, private schools PAY VAT on all the goods and services they buy. IT equipment, new buildings, educational supplies. So if they have to close, the exchequer will not be receiving this money either.
The vast majority of private schools are not like Eton, Harrow, Westminster etc. They are not elitist and provide excellent education with pupils leaving to become badly needed doctors, engineers, lawyers etc. I could go on, but believe me, most are brilliant schools and many parents make substantial sacrifices so that their children can attend.

You are not understanding the way in which VAT works. The VAT paid on purchases is deducted from the VAT received on fees. The net amount is paid over to the exchequer, unless the input tax in one quarter exceeds the output tax, in which case the school would get a refund.

Suppliers, manufacturers, distributors, and retailers all collect VAT on taxable sales.

A simple example:

I make childrens' toys which I sell to a number of shops.

In the first quarter, assuming that I haven't made any sales, I claim back all the VAT that I have paid for my materials and expenses.

2nd quarter I am still building up my stock but I do sell a few toys on which I charge VAT. My input tax (on materials etc) still exceeds my output tax on sales and so I get a refund.

3rd quarter - coming up to Christmas. I sell a lot and charge VAT on each sale. The VAT on my inputs is less and so I pay over a large sum to the Exchequer.

The shops who are buying my toys will claim back the VAT that they've paid me. They will then charge the customer VAT on their selling price (which will of course have a markup). Because it's coming up to Christmas they have a good quarter and also pay over a chunk to the Exchequer.

VAT is a tax that moves up through the suppliers of the goods, the makers and then the retailers until it reaches the final purchases - ie the public who cannot claim it back.

It is different to the old system of purchase tax when the final purchase pays the tax and there are no interim collections.

Disadvantage doesn’t start in school, it starts in the womb.

Labour is no longer going to remove charitable status from private schools but will impose VAT on its income/fees.
Right?
Well that’s this week’s summary.
Not a good look for Labour.