Labour’s plans to charge VAT on school fees is understandably concerning many of the clients we work with whose children are (or will be) educated in the private sector. There is a lot to consider…
Firstly, the plans could create significant demand for schools with more affordable fees as parents work to keep their child within the independent schooling system. For those who decide to keep their child at their current school, it could mean that there is less money available for ‘extras’, such as trips abroad, extracurricular clubs or one-on-one learning support.
It gets more complicated for parents who have plans to send a child to private school but have not yet committed, or whose child already has older siblings at a private school. These parents may decide to change tack and search out a well-reputed state school for their child. However, the best state schools may not be local, so we may see many parents trying to move into desirable catchment areas. This demand would likely lead to significant upward pressure on property prices in these areas. Not a new phenomenon, but one to give extra fuel from an unlikely source.
If more parents turn to state schools, it is also likely that the state system will come under pressure from parents whose children would have ordinarily been educated through the independent school network.
Given the extent of the work we do advising on school fees planning, we know that any changes may impact grandparents as well as parents.
With so much to consider and so many potential outcomes for parents potentially affected by Labour’s plans, the most important thing is to be prepared for any situation. At S4 Financial, we can put together a ‘fully costed’ school fees plan to help you understand the benefits and disadvantages of each approach before you make a decision.
Please be assured that help is out there and solutions are available. If you are concerned about a potential school fee increase, please do feel free to reach out.