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The VAT exemption on the supply of education by private schools be abolished.
This is necessary to improve the vertical equity of taxation when the current exemption for VAT charges on private school fees provides a benefit very largely enjoyed by the wealthiest in society.

#People pay taxes to cover the state education budget. Then they pay again to educate their own children. Therefore vertical tax equity insists that VAT be charged on education?


11 thoughts on “Whut?”

  1. Perhaps he really is arguing for private education (and health insurance, for the same reason) to be tax deductible.

  2. As befits someone who shares a name with a back from the 2021 Lions tour, I see that Rob Henshaw is running rings round Spud’s simplistic analysis of the position and has therefore been banned as a troll.

  3. I approve: I suspect that all the special rules about taxes and charities of every sort should be scrapped – especially rules for political parties. Haul them all down. Bring on the Dissolution of the Universities, the sinking of the RNLI, the holocaust of the National Trust and so forth. The country would be better for it.

    ‘tis a consummation
    Devoutly to be wished.

  4. Kind of on the side of the Murph here, would also scrap charitable status for the vast majority of existing organisations, including most if not all schools.

  5. @Jimmers

    You have to remember the Spud definition of ‘troll’

    “Anyone who demonstrates knowledge of a subject I am talking about, especially when that knowledge is greater than mine”
    “Anyone who asks questions I cannot answer or who points out errors in my analysis or hypocrisies or contradictions in my arguments”
    “anyone who disagrees with me”

    “Allowances will be made for anyone who disagrees with me using an argument even worse or factually inaccurate than mine, so that I can smugly and condescendingly dismiss their argument”

  6. If the schools register for VAT they will be able both to raise their fees by 20% and deduct VATable inputs. Quite a score for the schools that manage not to go bust.

    A proportion (25%?) of the 600,000 pupils will be decanted into the state system. This will make the exam league tables look good, but will require new school buildings. So the net return to the taxman will be nugatory.

  7. @ philip
    Negative rather than nugatory. Apart from the new school buildings, the state system would need to hire some more teachers (mostly those declared redundant by the private schools) to cope with the extra classes at schools in middle-class suburbia where there are currently only places for 70-odd% of teenage boys in the catchment area.
    Fees would go up by less than 20% as most of the inputs except food and staff costs would be effectively 16.67% cheaper.
    Apart from my quibble, Yeah.

  8. What he’s complaining about here is that people who pay for private education of their children may get an advantage for the children by doing so. For quite a few people this is unsatisfactory as they feel it is better for everyone to get mediocre education rather than have some get mediocre and others good.

  9. Philip

    “If the schools register for VAT they will be able both to raise their fees by 20% and deduct VATable inputs. Quite a score for the schools that manage not to go bust.”

    Not even close. Most close run with teachers salaries >60% of fee income. Worse still, if the inputs that are VATable are directly to be used by the children/users of the service, as opposed to the people running the service for the benefit of the children, the VAT is not recoverable as the end user is not VAT registered. It’s mental but it’s true – the same piece of kit from the same supplier could be VAT recoverable or not, depending on exactly how it’s used.

    The VATable inputs are trivial in comparison to the 20% in fees. This will be a bloodbath.

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