Starmer's stubbornness

LizzieDrip

^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!

LizzieDrip where do you get schools raising their fees ?

VAT is added to the fees invoice, they will not have a choice of how much VAT they charge.

Exactly, LizzieDrip, if the school once registered for Vat can claim that back on their running and capital costs surely this means fees could be lowered and therefore the Vat would be lower and the final bill would not be as much s the full 20%.

Sorry, should have read as much as the original fees plus 20% VAT.

The VAT would still be 20% on the taxable supply!

🤦‍♀️ I give up

VAT is added to the fees invoice, they will not have a choice of how much VAT they charge.

But GrannyGravy they will have the choice of how much of the cost of that VAT they pass on to the customer.

The more the school chooses to pass on, the more the customer will pay - isn’t that what all the moaning is about

Please refer to my post of 13.07 today, from an accountant advisor.

LizzieDrip

^VAT is added to the fees invoice, they will not have a choice of how much VAT they charge.^

But GrannyGravy they will have the choice of how much of the cost of that VAT they pass on to the customer.

The more the school chooses to pass on, the more the customer will pay - isn’t that what all the moaning is about

Please refer to my post of 13.07 today, from an accountant advisor.

I think you are confused.

There is no option to pass on as you put it.

VAT is a tax due to HMRC.

Private schools are not charities, they’re businesses. There’s a particularly clear divide here between those of us who support Labour’s proposals and those who don’t
To dismiss it a as the politics of envy says a lot about those who see private schools as sacrosanct and state schools as awful

Iam64

Private schools are not charities, they’re businesses. There’s a particularly clear divide here between those of us who support Labour’s proposals and those who don’t
To dismiss it a as the politics of envy says a lot about those who see private schools as sacrosanct and state schools as awful

I do not think state schools are awful, and have never said that.

We have used both stare and private education.

When committing to private schooling we budgeted for the entire period of schooling, to suddenly have an increase of 20% could have meant disruption to our child’s schooling.

As for supporting Labour’s policies, I have no faith that the tax £’s gained would be ring fenced for state schools.

state not stare 😡

No GrannyGravy I’m not in the slightest bit confused. Please refer to my post of 13.07 - they explain it perfectly!

My understanding is that, when private schools have to pay VAT the amount of money the customer (parent) will have to pay, will increase.

Call it whatever you want but the bottom line is, the customer will pay more - correct?

If this is not correct, and the customer won’t have to pay more, then what the f* is all the moaning about.

Now I give up🤷‍♀️

GrannyGravy just in case you can’t be bothered, here’s the post again. You’ll see they use the term ‘pass on’ to the parents regarding the cost of the VAT:

“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%.”

LizzieDrip

No GrannyGravy I’m not in the slightest bit confused. Please refer to my post of 13.07 - they explain it perfectly!

My understanding is that, when private schools have to pay VAT the amount of money the customer (parent) will have to pay, will increase.

Call it whatever you want but the bottom line is, the customer will pay more - correct?

If this is not correct, and the customer won’t have to pay more, then what the f* is all the moaning about.

Now I give up🤷‍♀️

I have no idea where you are coming from LizzieDrip

Of course the parents will be paying more, 20% more in VAT.

This is not an increase in fees which go towards their child/rens education it is a Government tax on school fees which trots straight off to HMRC.

LizzieDrip I have owned a VAT registered company for over 40 years (and still do)

seeking to absorb some of the VAT

How do you suppose that will happen?

GrannyGravy13

LizzieDrip

No GrannyGravy I’m not in the slightest bit confused. Please refer to my post of 13.07 - they explain it perfectly!

My understanding is that, when private schools have to pay VAT the amount of money the customer (parent) will have to pay, will increase.

Call it whatever you want but the bottom line is, the customer will pay more - correct?

If this is not correct, and the customer won’t have to pay more, then what the f* is all the moaning about.

Now I give up🤷‍♀️

I have no idea where you are coming from LizzieDrip

Of course the parents will be paying more, 20% more in VAT.

This is not an increase in fees which go towards their child/rens education it is a Government tax on school fees which trots straight off to HMRC.

And input tax recovery?

Whitewavemark2 of course as per my post of 13.30 today.

(simplistic I know, but mitigating circumstances)

This is not an increase in fees which go towards their child/rens education it is a Government tax on school fees which trots straight off to HMRC

Good!

LizzieDrip

^This is not an increase in fees which go towards their child/rens education it is a Government tax on school fees which trots straight off to HMRC^

Good!

You do realise that University Fees (paid for education i.e.fees by another name) are currently exempt from VAT. Will you be saying good if/when they become subject to VAT

Taxing childrens or young adults education is wrong on every level.

It is indeed.

The VAT we all pay will find its way into the revenue.

Now a business has a choice.

1. To choose not to pass on the 20% VAT by tightening its belt in various ways.

2. To partially pass on the 20%

3. To fully pass on the 20%.

The schools will now (if they haven’t previously registered for VAT) have the ability to recover all the input tax they have previously had to absorb.

So the VAT on all the goods and services they now receive can be fully recovered, providing it is related to a taxable supply.

As I have previously posted, none of this will happen until at least the next tax year, by which time the customer will be able to decide to continue with this supply or seek state education. If their funds do not run to the ability to buy education for their child. They will simply be making the same choice as 93% of the population.

No big deal I would have thought.

Whitewavemark2 it is not a matter of passing on partially or fully if a company is registered for VAT any service goods provided has to be invoiced for the cost involved plus VAT at the appropriate rate.

Are you suggesting that the schools reduce their fees by a percentage so that when VAT is added to the invoice it will be the same as before the VAT was chargeable?

If so this means a reduction in actual fees/money to the school.

As HMRC tax collection is mainly if not solely done by computer programs/systems the schools will have the added cost of these and/or higher accountancy bills.

GrannyGravy13

LizzieDrip

This is not an increase in fees which go towards their child/rens education it is a Government tax on school fees which trots straight off to HMRC

Good!

You do realise that University Fees (paid for education i.e.fees by another name) are currently exempt from VAT. Will you be saying good if/when they become subject to VAT

Taxing childrens or young adults education is wrong on every level.

No it is different on a couple of levels.

Universities are defined as “eligible bodies” and the supply therefore is exempt. It is an exempt supply of education, vocational courses etc. But what the university will always have to do is absorb the vat relating to the supply of education.

So why you may ask yourself are private schools not classed as eligible bodies?

Because it seems they wanted it all ways.

They wanted the ability to reclaim VAT as well as have their supplies as a charity zero-rated rather than exempt as an eligible body.

VAT can be charged on private education because it has been previously charged at zero-rating.

I would like to add that they will almost all be registered for VAT in order to claim input tax but it was not a requirement as it will be once they are subject to a 20% charge on their supplies.

so in my opinion, the fairest thing would be to reclassify them as an “ eligible body”, where they absorb all the VAT on the supplies of goods and services they receive and treat their supplies of education as examples.

They have lived very well off the tax payer for a good few decades I think.

GrannyGravy13

Whitewavemark2 it is not a matter of passing on partially or fully if a company is registered for VAT any service goods provided has to be invoiced for the cost involved plus VAT at the appropriate rate.

Are you suggesting that the schools reduce their fees by a percentage so that when VAT is added to the invoice it will be the same as before the VAT was chargeable?

If so this means a reduction in actual fees/money to the school.

As HMRC tax collection is mainly if not solely done by computer programs/systems the schools will have the added cost of these and/or higher accountancy bills.

Yes, school fees have risen way beyond the RPI year after year after year. A reduction does not seem entirely unreasonable.

Treat their supplies as exempt not examples!

Whotewavemark2 I can see the argument for making private schools eligible bodies.

If this were to happen, I hope it would not deter them from awarding scholarships and such like to those who are unable to afford to send their children to them under normal circumstances particularly those with SEND.