Worldwide, private education, taxes, and subsidies:

Greece’s eruption of VAT on fees

Greece implemented a 23% VAT tax on private school tuition about a decade ago as part of the austerity measures mandated by foreign creditors during the nation’s financial crisis. Parents, teachers, and school associations fiercely opposed the plan, claiming it would restrict educational opportunities and disproportionately impact middle-class families. Later that year, the Greek government reversed its decision and exempted independent schools from VAT as a result of the backlash.

Many independent schools thus closed for the night. Many instructors left the profession when many of them lost their jobs. This levy had such an impact that it prevented thousands of displaced children from finding admission to state schools. While students waited outside school gates in the hopes of being admitted to already-full schools, parents resorted to the streets. This migration of students from one field to another had enormously important social and economic repercussions. To stop the mayhem that had been caused, the policy had to be reversed.

What about other countries?

Diversity in Denmark

A growing percentage of youngsters in Denmark—14%—attend private schools. In addition to charging tuition, many private, or “free,” schools also get government funding via a voucher program. This financing is available to all schools, irrespective of their religious or ideological orientation. Approximately 75% of the funds allotted to fully state-funded schools are often used by the government to support private schools. The Danish Parliament is in favor of this strategy because it thinks it increases competitiveness, fortifies public schools, and encourages diversity in student backgrounds and educational options.

New Zealand: taxing and providing subsidies

Although private education is subject to a consumer tax in New Zealand, each secondary school student enrolled in a private school is also eligible for a minor subsidy of around £1,000. This indicates that the impact of GST is much lessened for the least expensive institutions.

 

What will be the possible consequences here in the UK when VAT is added?

Taxpaying parents who send their kids to an independent school in Britain are helping the economy by relieving the state sector of additional expenses and pressures and boosting public coffers.

However, adding VAT to school fees jeopardizes everything and, despite common sense, might not generate any revenue at all. In reality, taxpayers may have to pay for this.

“A new report demonstrates that, in addition to the possibility that it won’t generate funds for state schools, it may also hurt disadvantaged kids by further taxing the already beleaguered state sector, decreasing bursary and scholarship opportunities for gifted kids, and forcing others out of well-liked state and grammar schools.

Additionally, we run the risk of closing small, independent schools in the area that are unable to absorb students and laying off employees.

 

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