Starmer's stubbornness

So, it would be illegal for a private school to absorb some of the VAT cost, rather than pass that cost onto the customer?

Am I interpreting that correctly GrannyGravy and GSM?

Yes, they must invoice the parents for the full amount of VAT payable on the fees.

The state school system is suffering from massive underfunding and shortages. It needs huge investment.
Meanwhile schools in the private sector pretend to be charities and don't pay VAT.
If they want to continue doing so why not lay down certain rules? So perhaps teachers have to commit to spending one day a week in a state school. The school has to sponsor members of staff in a state school. Or it could supply funding for breakfast clubs or after school clubs. 6th formers have to spend so many hours per term assisting in an inner city school.
Children identified as gifted could visit the school for extra tuition.

It would all of course be a massive undertaking to sort out. But unless they are made to fulfill some charitable obligations I really cannot see why these schools should have charitable status.

Glorianny

The state school system is suffering from massive underfunding and shortages. It needs huge investment.
Meanwhile schools in the private sector pretend to be charities and don't pay VAT.
If they want to continue doing so why not lay down certain rules? So perhaps teachers have to commit to spending one day a week in a state school. The school has to sponsor members of staff in a state school. Or it could supply funding for breakfast clubs or after school clubs. 6th formers have to spend so many hours per term assisting in an inner city school.
Children identified as gifted could visit the school for extra tuition.

It would all of course be a massive undertaking to sort out. But unless they are made to fulfill some charitable obligations I really cannot see why these schools should have charitable status.

The fee paying schools our children attended had free places for gifted children along with paying for their uniforms, books etc..

Sorry posted to soon, these children would not have been able to attend otherwise, and nobody was aware who they were so they could not be singled out by their peers.

Yes, they must invoice the parents for the full amount of VAT payable on the fees

OK, fair enough. I’m enlightened - still fine with the policy though.

GrannyGravy13

Glorianny

The state school system is suffering from massive underfunding and shortages. It needs huge investment.
Meanwhile schools in the private sector pretend to be charities and don't pay VAT.
If they want to continue doing so why not lay down certain rules? So perhaps teachers have to commit to spending one day a week in a state school. The school has to sponsor members of staff in a state school. Or it could supply funding for breakfast clubs or after school clubs. 6th formers have to spend so many hours per term assisting in an inner city school.
Children identified as gifted could visit the school for extra tuition.

It would all of course be a massive undertaking to sort out. But unless they are made to fulfill some charitable obligations I really cannot see why these schools should have charitable status.

The fee paying schools our children attended had free places for gifted children along with paying for their uniforms, books etc..

But that isn't really a charitable act is it? Perhaps if 20% of the children attending were on free places it might be considered such. But I can't think of a single charity that only benefits a few select people.

Obviously you don’t know how much assistance independent schools give to state schools children whose parents can’t afford fees Glorianny. Unfortunately you don’t understand the legal meaning of charitable status. I have already posted a link. Independent schools do not pretend to be charities. If registered with the Charity Commission they are charities.

This from CT: Accountant Advisors (online):

“ Will parents be expected to pay the full amount of VAT?

This will depend on the school.

Independent schools will have to become registered for VAT following this legislation, so there will be a possibility for schools to recover VAT on capital and running costs. In turn, this could allow independent schools to absorb some of the VAT cost to be passed on to parents. Based on our understanding from working closely with private education clients, we understand that some schools are seeking to absorb some of the VAT cost and therefore the increase in fees will not likely be as high as 20%.”

Oo, must be some illegal activity going on there then

Glorianny you are wrong in this instance.

There were so many interactions between the independent schools, local schools and community, too many to mention.

They will still have to invoice the parents for the VAT and pass it on to HMRC. Whether they have the means to refund part of the charge is another matter.

LizzieDrip

This from CT: Accountant Advisors (online):

“ Will parents be expected to pay the full amount of VAT?

This will depend on the school.

Independent schools will have to become registered for VAT following this legislation, so there will be a possibility for schools to recover VAT on capital and running costs. In turn, this could allow independent schools to absorb some of the VAT cost to be passed on to parents. Based on our understanding from working closely with private education clients, we understand that some schools are seeking to absorb some of the VAT cost and therefore the increase in fees will not likely be as high as 20%.”

Oo, must be some illegal activity going on there then

Nothing at all illegal going on. Someone else can explain how businesses can offset these amounts.

But, equally important, private schools won't be putting 20% vat on their minibus services, their breakfast and after school clubs, their catering, and most importantly not on their boarding fees either.

GrannyGravy13

Glorianny you are wrong in this instance.

There were so many interactions between the independent schools, local schools and community, too many to mention.

👍

So, it comes down to semantics i.e. ‘they must invoice the customer.

It would appear that clever accounting (at which I’m sure private schools are very adept) will enable them to actually absorb some of the VAT cost rather than passing all 20% directly onto the customer - should they choose to do so.

Absorbing some of the cost is not, in itself, illegal then GSM.

Private schools are currently not VAT registered.

What this actually means is that they pay VAT charged by their suppliers but they are unable to claim many of the VAT back and have to absorb it.

By becoming VAT registered they will be able to claim back the difference between the incoming/outgoing VAT however, as the VAT on fees is allegedly liable to be more than the schools incoming VAT bills they would end up having to pay the excess to HMRC.

(Hope that is clear, as I am wrangling a pre-schooler)

Freya5

Perhaps State schools should aim to bring their standards up to private schools, this will need more financial input, more schools, so smaller classes, more teachers, but hey it's easier to bring hundreds more children into state schools, more overcrowding than already is, for what, it seems is an ideological move, rather than a sensibly reasoned one.

State schools have been starved of funds by consecutive Conservative governments for years. Why should people care about the education of children that can’t go to private schools when they have an alternative? And let’s blame this on immigrants ( which I assume is what you are implying?); let’s blame everything on immigrants. And let’s not forget the Conservative government ( or Brexit) haven’t reduced those numbers have they?

Try again

business/school has paid £20 VAT
Same business/school has charged £40 VAT

VAT due to HMRC £20

LizzieDrip

So, it comes down to semantics i.e. ‘they must invoice the customer.

It would appear that clever accounting (at which I’m sure private schools are very adept) will enable them to actually absorb some of the VAT cost rather than passing all 20% directly onto the customer - should they choose to do so.

Absorbing some of the cost is not, in itself, illegal then GSM.

No, it is not. But the parents must be invoiced for VAT on so much of the service provided is subject to VAT.

LizzieDrip

So, it comes down to semantics i.e. ‘they must invoice the customer.

It would appear that clever accounting (at which I’m sure private schools are very adept) will enable them to actually absorb some of the VAT cost rather than passing all 20% directly onto the customer - should they choose to do so.

Absorbing some of the cost is not, in itself, illegal then GSM.

Any VAT registered entity must by U.K. law charge VAT at the appropriate rate on goods/services provided, no ifs no buts.

Germanshepherdsmum

Obviously you don’t know how much assistance independent schools give to state schools children whose parents can’t afford fees Glorianny. Unfortunately you don’t understand the legal meaning of charitable status. I have already posted a link. Independent schools do not pretend to be charities. If registered with the Charity Commission they are charities.

This.

But it hasn't decreased numbers applying for private school places, as was claimed it would, at length and frequency one past threads, as evidenced by the reference I quoted above, at 10.20.37.

On the Politics of Envy: out of interest, I googled this and it came up with a whole series of quote, books, articles, all by right wing thinkers seeking to discredit this seeking a fairer society. It's nothing but a biased political trope.

GrannyGravy13

Glorianny you are wrong in this instance.

There were so many interactions between the independent schools, local schools and community, too many to mention.

Not in every area, we have one proper prep school and several primary independent schools (3-11 or 3-13 and in one case 4-16)

They very much interact with EACH other. Have sporting competitions between Independent Schools, and often the bursaries and scholarships are partial not full.

I am well aware of the many differences between the quality and education in these local Independent schools and state primaries in the same area.

My eldest child attended the prep school, with a partial scholarship based on ability. He went there, between 3-11, then onto our local (state) Grammar School.

My three younger children all attended a local, large primary school (4 class entry, Approx 750 pupils), then all went onto a state selective comprehensive.

So I have personal experience, particularly at Primary level. Fundamentally, the classes were very small, 10-12 pupils in a class, as opposed to 30 in the state primary, many more opportunities for extra curriculum activities, better and far more expensive school trips. Less behavioural issues due to much smaller classes and termly exams in every subject and competition very much encouraged.

My son was happy and safe there.

Our other children were happy and safe in their state junior school. I became a school governor to understand the school and education system and found the teaching staff, on the whole, to be very hard working, competent and caring.

I never felt my younger children received a “second-best” education despite the many differences.

My first child was from a different father and almost 13 years older than my next child, so no resentment.

No, it is not. But the parents must be invoiced for VAT on so much of the service provided is subject to VAT GSM

OK. The school must invoice the customer regarding the amount of VAT - as with any business transaction.

But the school can - if it so chooses - absorb some of the cost of the VAT. It does not necessarily have to pass on all the 20% cost to the customer by raising fees.

Back to my original point. If customers are unhappy that their school fees are going up by 20%, challenge the headteacher about it. Don’t expect the government to provide you with a tax break!

State schools’ funding has been slashed for years - we’ve just had to get on with it!

Remember that parents who send children to independent schools also pay tax towards the funding of state schools, but don’t use state facilities.

If customers are unhappy that their school fees are going up by 20%, challenge the headteacher about it.
Just a small, but important word of advice. Don't challenge the Headteacher, they have enough to deal with and are not experts in finance. Ask for a meeting with the Bursar for the correct explanation. They have been prepared for long before Starmer.