Why should they pay VAT? They are charities. They do do charitable work. They often have significant bursaries. They also take some of the burden off the state sector.
I thought the usual thing was to offer a discount for prompt payment.
Interesting. This has been legal in Ohio for many years.
They should pay VAT (that is, charge it on their fees and remit same to HMRC) because they sell value-added services.
They have charitable status. A very, very small amount of the work they do can be described as charitable. The vast majority is providing a desired service for a large fee. If bursaries were offered randomly to people who can’t afford fees, they might be charitable. As they are offered exclusively only to the very brightest of those who can’t afford fees*, the schools get a handy league table bonus out of them which somewhat reduces the altruistic value. And if people are keen to help out the state sector, they are welcome to make a large donation to their local comprehensive. But they don’t, because the fees are not a charitable donation to the general cause of education. They’re a purchase of specific benefits.
Private schools are charities last, education providers a distant second and purveyors of positional luxury goods to the wealthy first and foremost. They don’t offer a noticeably better education than the good state schools that people who can afford their fees would otherwise send their children to. What they offer is access to an old boys’ network and unearned cachet for the CV. That is the value added they offer and for which they charge so handsomely (Averageof £30K/year boarding, £15K/year overall). We charge VAT on smart suits and professional association membership fees which offer exactly the same career enhancement benefits and there’s no reason not to for private school fees. This A+ centre-left politics and I salute it.
*With average fees of £15K, the people who can afford fees after even a 50% bursary aren’t exactly going to be charity cases.
£10 from £7.50 is a hell of a jump for small businesses in particular but it’s a very strong move. Fwiw, 9% of the workforce are on minimum wage atm, I have no idea how many are earning under £10 but it has to be many millions.
I also saw a piece on The Guardian a few weeks ago that said 25% of UK families have less than £95 to their name. The fruits of capitalism, etc …
I wonder if he might look more of a leader now he has something to actually work with (probably not, and it’s probably too late for him any way …).
Nonetheless, agreed, good signs.
Eh. I send my daughter to a private (UK) school, and the above is not true of her school nor of many others.
There are certainly many elite private schools for whom the above may be true, but there are also a large number of schools targeting (and this is a group into which I reluctantly place myself) the “aspirational middle class”. These are not the institutions to which the rich and famous send their kids - quite a lot of her class are the children of immigrants (ours included) - but they do tend to offer smaller class sizes and more individual attention, better facilities, and a wider range of subjects and activities for students to participate in. They also often tend to be better quality on average than state schools and are able to push students more due to the aforementioned factors, resulting in better exam results and better university placements.
We decided to send her there largely because she was born in a mini-baby boom which the government failed to plan for, and by the time she hit school age the state school she would have gone to was cramming in another class per year of 30 kids with no additional staff or facilities. At present she has a class size of 11. By our priorities it’s worth it, painful though it is.
(We also don’t pay £15K a year, but nor do we qualify for a bursary. That said, pretty much of all our disposable income goes towards school fees. The annoying thing about the bursaries on offer is that if your income level is low enough to get a partial reduction on fees, you probably can’t afford the remaining fees.)
That’s an argument for better funding of schools, not tax avoidance.
For the British-English impaired, when you say “bursary”, you mean a subsidy or discount to lower the cost of going to a school? What Americans would call a “scholarship”?
Really? You can, of course, give facts and figures to back up that statement, can’t you?
Don’t get me wrong: schools that don’t do charitable work should indeed lose their charitable status - and not all independent schools are charities. There are bursaries and scholarships for the talented, usage of facilities (playing fields being a big one in some areas), and so on. I am a member of an organisation that has donated to and helped an independent school for centuries (yes, really) and used to have a presence on the board of governors, and I have been told that yes, we do check. I am not privy to details.
Here’s a piece by John Redwood MP. He states - without sources - that
Of course, they pay other taxes - National Insurance, VAT, etc.
The two do overlap. A scholarship is financial support for education for academic merit. A bursary is an endowment given to a student, perhaps to cover the cost of the school uniform, or equipment, or a trip abroad.
That, of course, is as much a measure of income disparities as it is of tax burdens.
There are, per here, c.512,000 pupils in about 1200 private schools. That makes c.430 pupils per school, of which let’s say 95% are full fee-paying, so 409.
These pupils are taught 5 days a week, between let’s say 9 and 3, and do perhaps 1.5
more hours of extra-curricular activity - games, music, drama, chess clubs - per day, making 7.5 hours a day. We’ll ignore Saturday games, Outward Bound expeditions and the like just now. Assuming 3x12 week terms, this equates to 3657.5=1,350 hours of input into a single pupil, or 551,475 pupil hours aimed at fee-paying pupils.
Boarding schools of course do rather more - 24/7 care and provision of amenities during term time which is many more hours. We’ll ignore that just now too.
Those 551,475 pupil hours of course represent the majority of operational costs - staff wages, academic and extra-curricular resources and everyday necessities such as food and heat. Again, there’s a boarding school factor for hotel costs.
As against that massive underestimate of over half a million pupil hours, what charitable activities can we put in the balance? 5% of pupils with partial scholarships or bursaries towards some costs makes a <5% dent in those hours. A local school gets access to the playing fields when they’re not needed, perhaps 1 day per week. If 120 pupils get 2 hours a week on the fields, that’s 8640 pupil hours. Let’s send some teachers out to do outreach work with local schools - if 20 teachers do 3 hours in front of 30 pupils every week of every term, that’s 1,800 pupil hours. Which brings us to 10,440 pupil hours, or just under 2% of our total. Add in the charitable portion of work done with scholarship/bursary kids and you are still only looking 3-4% of the non-boarding school, minimal extra-curricular activity estimate of pupil hours.
Private schools spend most of their time and money educating their pupils. It would be weird if they did not. They spend a lot of money on providing better facilities and a lot of time on providing activities that make use of them. It would be weird if they did not.
Compared to an actual charity, which actually spends to a first approximation 100% of its efforts on supporting charitable beneficiaries, private school’s claim to be charities is a bad joke.
If this is in response to my post, I wasn’t intending an argument for tax avoidance (although obviously I’m not keen to pay more money). I was responding to the view that private schools are elitist institutions whose main function is “access to an old boys’ network and unearned cachet for the CV”, which is not true for many - possibly even most - of them.
And I’m all for better school funding. Alas, the failure to anticipate the increased need for school places afflicted both the Brown and the Coalition governments, so no party is squeaky clean on that one.
The wheeze with private schools - I mean the converted old art school type building not 150 year old Dulwich College’s - is you divert income to improve the main asset, the school building/s and any grounds. And,of course, to pay the mortgage/loan.
Same with private nursing homes, etc; by all means make a profit but it’s also about asset value. That, and accounting trickery.
Do you have any basis for that figure of 95%? A quick Google shows that Harrow School (one of the top tier), for example, has 150 scholars out of 805, with scholarships ranging from 5% upwards. 30 scholarships are awarded each year. Eton Collage (another top tier place) has 140 scholarships, ‘more than 10% of the school population’. Bursaries are on top of that.
There are ~1300 pupils at Eton, so the bursary rate is 21%. And scholarships are on top. That’s way above your 5%.
But I haven’t got data for that sector as a whole; maybe you do?
Tonight’s dinner is a big plate of crow. Clearly, I was wrong about Corbyn’s ability to lead the Labour Party into a general election. Corbyn will be leading an incredibly energized Labour Party completely united behind him on June 13 and he’ll be able to attract the best of the Parliamentary Labour Party into his cabinet. He’ll need them as I still don’t think he’s the type of person that is naturally a good prime minister. However, with a few policy wonks and some good horse traders in his cabinet, he could usher in a strong Labour leadership once the May minority government falls.
You do realise that he lost big time, right? He just wasn’t as bad as May. But Labour are still 56 seats behind the Tories.
Politics is often a game of expectations, and Corbyn exceeded them by leaps and bounds. That has to count for something.
And, under the pre-21st century tradition for 100 years, before the rebirth of nationalism over the world, Labour would have had around 40 seats in Scotland added on.
Hold up, hold up, hold up … I might be discovering a difference in British and American usage for the first time.
When you say “scholar,” do you understand it to mean “a student receiving financial assistance”?
Because in American usage, “scholar” always means “a person who is well-educated.”
If this is the case, then that changes my understanding of dialogue spoken by Derek Jacobi portraying George Cording in the first season of “The Jury.”
A young Sikh boy is charged with murdering a classmate, and one witness says that he saw the boy running away with a bloodstain on his shirt.
Jacobi, as the defense counsel, asks whether it was definitely blood or could it have been the accused’s necktie. He notes that the students wore color-coded ties, including “red for scholars.”
I assumed that meant that the boy had earned an honor for earning good marks. If I was mistaken, and it’s the case that a school would make students receiving financial aid wear distinguishing neckties, that comes off completely different.
He may have ‘lost’ in terms of the Tories getting more votes and seats and still clinging onto Number Ten, but given the almost universal predictions that Corbyn would drive the Labour Party into the ground and hand the Tories a landslide in this election, this outcome is quite reasonably seen as a victory.
Whether it’s sustainable or not remains to be seen, but the confidence of the Tories has been shaken while Labour may get its vim back.