Mark Wadsworth

This is a spare 'blog in case my main 'blog at markwadsworth.blogspot.com isn't working

Small number x large number = large number – shock!

From the BBC:

Independent schools are using a “tax payer subsidy” to provide luxuries like golf courses, beagling and shooting for their pupils, a court will hear. Private schools in England and Wales have to show they provide a “public benefit” in exchange for their tax-free charitable status.

… on Monday the court will receive evidence from a group of educationalists and lawyers, the Education Review Group, which argues that independent schools are being allowed unfair tax advantages through their charitable status. The group claims that private schools enjoy tax breaks worth £88m per year – with some of these schools providing a luxury “gold-plated” service at a cost that is prohibitive to most families.

OK, there are about 700,000 children at private school, so that £88 million (about 0.1% of the education budget) works out at £125 per pupil per annum, i.e. nothing, in the grander scheme of things, and a tiny fraction of the PAYE that private schools pay.

If you think about it, the ‘charity tax break’ is a stupid tax break, because what it means in practice is that most private schools are exempt from paying corporation tax on their profits, i.e. while the money they spend on actual education (teachers’ salaries) is liable to tax in full, i.e. PAYE, the income they don’t spend (the profits) is tax exempt. For this reason alone it would be better to scrap the tax break and hand out education vouchers of £125 per pupil.

And what these Righteous also forget to mention is the subsidy which private schools don’t get, i.e. the £8,000-odd per pupil which state schools are given*. If parents were given this subsidy in cash, then we’d find that the net cost of private education is ‘prohibitive’ to very few families indeed.

* OK, I’m cheating a bit here, the schools themselves are only given about £5,000 per pupil, and £3,000 per pupil disappears in admin and overheads.

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