Hammer blows to CH finances

Anything that doesn't fit anywhere else, but that's still CH related.

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sejintenej
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Re: Hammer blows to CH finances

Post by sejintenej » Wed Oct 10, 2018 9:09 am

DazedandConfused wrote:
Tue Oct 09, 2018 9:12 pm
VAT on fees is ridiculous, so many families will be priced out of private education which would then put extra pressure on state schools with a sudden influx of pupils
Charging VAT on education is a slippery slope- what about educational activities outside of school, what about university tuition fees?
In France I think everything including food is subject to VAT at 20% except restaurant bills at 8% (last year's figures). Then again their tax regime is vicious; companies are required to pay tax on estimated profits a year IN ADVANCE. Taxes and social costs make up over 50% of any business' income and out of the remainder they have to pay for goods and services, salaries , overheads etc. .
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Re: Hammer blows to CH finances

Post by J.R. » Wed Oct 10, 2018 9:28 am

sejintenej wrote:
Wed Oct 10, 2018 9:09 am
DazedandConfused wrote:
Tue Oct 09, 2018 9:12 pm
VAT on fees is ridiculous, so many families will be priced out of private education which would then put extra pressure on state schools with a sudden influx of pupils
Charging VAT on education is a slippery slope- what about educational activities outside of school, what about university tuition fees?
In France I think everything including food is subject to VAT at 20% except restaurant bills at 8% (last year's figures). Then again their tax regime is vicious; companies are required to pay tax on estimated profits a year IN ADVANCE. Taxes and social costs make up over 50% of any business' income and out of the remainder they have to pay for goods and services, salaries , overheads etc. .
I do like France's tax ethic as far as collecting business tax is concerned, i.e. in advance.
John Rutley. Prep B & Coleridge B. 1958-1963.

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Re: Hammer blows to CH finances

Post by postwarblue » Wed Oct 10, 2018 10:37 am

DazedandConfused wrote:
Tue Oct 09, 2018 9:12 pm
VAT on fees is ridiculous, so many families will be priced out of private education ...
That is the entire political point.

It is based on the Socialist fallacy that where the State is perceived as having a duty to ensure provision, the State has to be the provider (and the people doing the provision must be employees of the State).
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Re: Hammer blows to CH finances

Post by rockfreak » Wed Oct 10, 2018 8:09 pm

They worried themselves about pensions,
But of fairness there was nairy a mention.
Only seven percent
To the private schools went
But this fact just escaped their attention.
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Re: Hammer blows to CH finances

Post by michael scuffil » Thu Oct 11, 2018 1:23 pm

Someone who charges VAT can also reclaim VAT. I don't know how much VAT CH pays (most of its expenditure is presumably on non-VATable items such as salaries).
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Re: Hammer blows to CH finances

Post by Foureyes » Thu Oct 11, 2018 1:58 pm

" I don't know how much VAT CH pays (most of its expenditure is presumably on non-VATable items such as salaries)."

It is covered in the accounts - see

https://www.christs-hospital.org.uk/inf ... s-2016-17/

VAT is explained at page 26 and quantified at page 36

David :shock: :shock:

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Re: Hammer blows to CH finances

Post by michael scuffil » Thu Oct 11, 2018 5:25 pm

So about half a million. Not insignificant, but not a great deal in the broader scheme of things (about 2% of total expenditure, unless I have overlooked something).

However, the report makes the point that VAT is not charged on fees because the foundation is not a 'business'. This is the crucial point. The whole ideology of VAT is that it is charged by (and collected by the revenue from) businesses only, and in the case of B2B transactions, can be reclaimed by the second B. To extend VAT to non-commercial transactions would be an enormous change. Or else independent schools would have to be classed as 'businesses', even though they are non-profit.

I must admit to being a VAT fan in the sense that I think it should account for a greater proportion of taxation. It is sometimes said this would be anti-social, but provided the current exemptions (esp. food and rent) are maintained, the burden would not fall on the poor. VAT has two advantages: it is cheap to administer; and it does not involve prying into people's personal circumstances. (However, it must remain 'business only'.)
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Re: Hammer blows to CH finances

Post by Foureyes » Thu Oct 11, 2018 7:09 pm

Michael,
I take your point about a school not being a 'business.' However, that argument is weakened by the growing number of people (some in very elevated positions) who make remarks like 'don't forget a school is a business'. Indeed, that argument is being increasingly used to re-label headmasters as chief executives.
However, I still don't see why overseas parents should not be charged VAT on the fees.
David :shock:

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Re: Hammer blows to CH finances

Post by Katharine » Thu Oct 11, 2018 8:45 pm

Michael, I would hope that you would approve of one more exemption from VAT, sanitary products. It’s a disgrace there should be VAT on such essential items for women.
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Re: Hammer blows to CH finances

Post by sejintenej » Thu Oct 11, 2018 8:52 pm

Foureyes wrote:
Thu Oct 11, 2018 7:09 pm

However, I still don't see why overseas parents should not be charged VAT on the fees.
David :shock:
UK military serving abroad? Diplomatic corps and their underlings serving abroad? Foreign national oligarchs using property addresses in the UK but "temporarily" abroad?

Idea may be fine but there will be those who find ways round the rules
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Re: Hammer blows to CH finances

Post by michael scuffil » Fri Oct 12, 2018 9:43 am

Foureyes wrote:
Thu Oct 11, 2018 7:09 pm
Michael,
I take your point about a school not being a 'business.' However, that argument is weakened by the growing number of people (some in very elevated positions) who make remarks like 'don't forget a school is a business'. Indeed, that argument is being increasingly used to re-label headmasters as chief executives.
However, I still don't see why overseas parents should not be charged VAT on the fees.
David :shock:
I agree with most of what you say here. But there is no VAT system in the world that discriminates between different classes of customer. At most, domestic customers might be given a way of reclaiming it. But frankly I find it impractical.
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Re: Hammer blows to CH finances

Post by michael scuffil » Fri Oct 12, 2018 9:55 am

Katharine wrote:
Thu Oct 11, 2018 8:45 pm
Michael, I would hope that you would approve of one more exemption from VAT, sanitary products. It’s a disgrace there should be VAT on such essential items for women.

I live in a country which (like almost all others) imposes VAT on all sorts of obvious essentials, including food, water, books and medicines. Female sanitary items and loo-paper, while essential, are relatively unimportant (economically) in the wider scheme of things. Once you start mulling over what is 'essential' and what is not, you never stop. A cooker is essential. So are clothes. The whole point of VAT is that ideally it is imposed on every commercial transaction. Private education is regarded by the EU as non-commercial only to the extent that it replaces a service normally provided by the state. A private language school, for example, is not exempt.
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Re: Hammer blows to CH finances

Post by TMF » Fri Oct 12, 2018 6:27 pm

1. Are pensions paid to ex-employees convicted of child abuse and rape?
2. Are pensions paid to ex-employees who turned a blind eye to child abuse?
3. Christ's Hospital has 405 million pounds in assets and received a >12% annual return on those assets in 2017.
https://www.christs-hospital.org.uk/inf ... s-2016-17/
4. There is no shortage of money to pay compensation to victims, to make amends to society, or to pay for the retirements of honest employees.

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Re: Hammer blows to CH finances

Post by Golfer » Fri Oct 12, 2018 7:57 pm

1) and 2) . Your problem is that the law says CH has to pay them. No way round this.

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Re: Hammer blows to CH finances

Post by rockfreak » Fri Oct 12, 2018 8:17 pm

michael scuffil wrote:
Thu Oct 11, 2018 5:25 pm
So about half a million. Not insignificant, but not a great deal in the broader scheme of things (about 2% of total expenditure, unless I have overlooked something).

However, the report makes the point that VAT is not charged on fees because the foundation is not a 'business'. This is the crucial point. The whole ideology of VAT is that it is charged by (and collected by the revenue from) businesses only, and in the case of B2B transactions, can be reclaimed by the second B. To extend VAT to non-commercial transactions would be an enormous change. Or else independent schools would have to be classed as 'businesses', even though they are non-profit.

I must admit to being a VAT fan in the sense that I think it should account for a greater proportion of taxation. It is sometimes said this would be anti-social, but provided the current exemptions (esp. food and rent) are maintained, the burden would not fall on the poor. VAT has two advantages: it is cheap to administer; and it does not involve prying into people's personal circumstances. (However, it must remain 'business only'.)

I don't see how you can say that Michael. VAT is a "flat" tax, therefore a regressive one. It impacts more on the poor than the rich.The rich can shrug it off. Countries that have flat taxes, like Russia for example, are massively unequal. This is presumably why the Tories like to ramp it up when they get into power, hoping that it won't be noticed while flagging up dramatic income tax cuts. When Labour's Alastair Darling was Chancellor after the 2007 crash he reduced VAT to 15% as one of his weapons to try and kickstart the economy because he presumably knew that economic recoveries start in the high street, rebooted by the likes of us rather than Bob Diamond and his friends. Tax is best administered when it is progressive, transparent and levied on unearned assets rather than earned income. Property and land; these are the places to go for tax, although it has to be said that Denmark and Sweden charge 55% on the top band of income tax and it doesn't seem to be doing them any harm. And then of course we should perhaps be joining together with the rest of the EU in making the tax havens more transparent.

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