VAT on private school fees

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The Labour government’s decision to apply VAT to private school fees has sparked fierce debate among parents, schools, and policymakers.

The FT’s public policy correspondent, Laura Hughes, explored the arguments put forward both for and against the proposed tax, which is now expected to raise £1.5bn for investment in state schools, including the hiring of 6,500 new teachers.

For many families, however, the policy presents a harsh reality. One parent interviewed for the article shares her struggles after pulling her daughter out of private education, a choice faced by thousands of others as rising fees become unaffordable.

Among the parents who worry over how they will afford the increase, the most anxious are those whose children have special educational needs (Send) and feel the provision in their local state schools is inadequate.

FT readers flooded the comments section, sharing diverse perspectives on the issue. While some condemned the plan as ideological, others argued it could help level the playing field in education.

Below is a selection of their responses. Join the conversation by sharing your views in the comment section.

Detracting from private and state

Parents already pay for state school places, whether they use them or not, through their taxes. This seems lost on most people. This is a typical, ideological, class grievance attack by Labour. No other sense in it, as it will ultimately detract from both state and private education. — Skippy

‘An envy tax’

This is an envy tax which will achieve nothing. The State will have to pay for extra public school expenses of the children that can no longer afford private school. And the general level of education will decrease. Very much like the rest of the Budget tax increases. All the extra borrowing in this Budget led to an immediate increase in interest rates that wipes out the extra revenue from tax increases. This government is a zero-sum game. A lose lose outcome all around. — CC2

Logical and reasonable

There is an argument that education has gotten worse because of private schools. The top 7 per cent of the country by earnings (and therefore probably influence) has resulted in a lack of emphasis on education by the state and an overall underfunded system. I’m pretty sure Rishi Sunak would have allocated more resources to education (as chancellor or PM) if his kids had had to go to a state school.

Private schools also abuse the system. Kids with severe special needs get kicked out of private schools and dumped on the state system, at huge costs to the state. So there is a logical and reasonable conclusion that one could arrive at to ban private schools altogether.

VAT is a minor compromise — and one that the private schools could mitigate against by closing the extra hockey pitches. Now the cat’s among the pigeons. — A Fund Manager eating humble pie

Reduced expenditure

If sufficient numbers from the private sector move to the state sector then, just like in Denmark, the state sector will improve and families (nurse practitioner with three children) won’t need to spend so much of their income on private school fees, which have continued to rise above inflation for years. Labour has been talking about VAT on fees for a long time and I know people who chose not to send their children in September this year as a result. — Anonymouse6

A blow to parents

Labour at its very worst. Crush those parents, who are prepared to go the extra mile to support their kids, without — and I’m fairly sure time will prove this to be the case — using those funds to make any difference at all to the state sector, whose numbers now will swell.

In mathematical terms, theory + envy = failure. — WHS1

Better for teachers

Having pupils from wealthier backgrounds in state schools will be a good thing for state schools and is likely to raise attainment, as will hiring more teachers. Private schools going out of business will also mean that better teachers end up in state schools. This is good news. Private schools distort the system and weaken education provision for the majority of pupils in the UK. — Wainlodes

Inequality and two-tier class system

It is insane in the first place to have schools charging £20,000 a year. Education should be free and public for all. Private schools increase inequality and create bubbles that reinforce the class structure. The bare minimum is that if you can afford a private school you finance the public system. Lacking good public schools is not a good reason to have a crazy expensive private education. What a failed line of reasoning creating and maintaining a two-tier class system for youngsters who have no say where they study and how this influences their future opportunities. — Always_Summer

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