Should VAT be charged on private education

But that's not the reason they're exempt.

VAT is a tax paid to producers who import something, add value to it and sell itcas a profit, on which they pay tax.

If i were a parent who paid a business to educate my child, i would do it to ADD VALUE to my child.

Now it is a fact that educational establishments dont pay VAT because they dont produce a tangible more valuable asset than they started with.
It seems education is not a valuable asset but i understand that schools are paid for by the taxpayer, a different model than universities who are paid for ostensibly by the students.

However the subject is about PARENTS paying for pre uni education.
Paying for adding value to their children.
Schools say law lets them off because schools are a charity and therefore non profit. ( they are supposed to redistribute income). Except they dont. Most public schools have a comfortable stash earning interest and many are left money in wills or gifts.

They may allow a local state school to use a playing field or swimming pool...doesnt cost anything. And they are certainly not non profit.

However i am not suggesting the school pay VAT.

I am suggesting parents do because they are buying added value.
In the outside world the company which does add the value can claim the VAT back from the one they sell to.
So if rules are followed, the school should pay the VAT back to the parents at graduation because they have added value and produced something more valuable.
Which of course is infinitely complicated.

So the whole education sector is not treated as a business.

However the excuse public schools use is that they are a charity. And they are not giving away ANYTHING to ANYONE for nothing.
They are doing it for a nice profit they park to one side. If their accounts show a zero balance then fine. But to say the vast majority of public schools are charities is untrue.

So parents should qualify for liability on the cost of the supplier of added value.

That's how VAT works on all products and services: The end purchaser pays it, not the business.

Let's look at some factual considerations:

1) Removing the VAT exemption will raise some revenue.

2) However, if private schools become VAT rated, they will then be able to reclaim VAT on purchases. There'll be an offset there so the net gain will be less than it at first appears.

3) Collection of that VAT will of course involve civil service admin. There's a cost implication there, which will again reduce the gain.

4) An uplift of 20% in school fees will, together with the general rise in the cost of living, result in some private pupils being displaced into the state system. There will be a cost implication to that.

Where are the costings?

Or this is simply another uncosted, *pseudo-populist policy AKA the politics of envy?

*Pseudo because aside from those consumed by the politics of envy, most people don't really care.

Yes, that's what I said.

Let's try again.

VAT exempt businesses cannot reclaim VAT on purchases.

So at the moment private schools are paying VAT but not charging the parents VAT.

Whereas in your proposed system they would charge it but not pay it.

Let's try a worked example:

A private school currently charges £5,000 per term. If they had to charge VAT on top the parents would now be be paying (assuming standard rated) £6,000 per term.
However, the school would now be able to reclaim VAT on lots of things that they buy (whereas currently they can't).

The net gain to the treasury would be the difference between the two.

And by the time we take into account the issues I raised in my previous post, any gain to the treasury would be further reduced.

As I said: Where are the costings?

You still haven't explained why public schools would be singled out from all the other Education & Training establishments.

And without costings it's meaningless anyway.

Where are the costings?

I saw an advert for gold coins yesterday and it said they are free of VAT. Which I have researched, and sure enough, gold for investment (coin, bar etc.) is free of VAT.
Labour brought that one in.
Gold is a luxury purchase and should be chargeable for VAT.
It seems crazy that I had to pay more than £20 to the government to get my car serviced. In view of that I do wonder about the whys and wherefores of VAT wherever it is charged. There is not much consistency.