KWC fees.

[Chinahand]

I have never said it is wrong of the state to tax people or for it to provide education. 

[code99]

It is interesting to observe the mindset of this current IOMG, which does not only apply to the CM but also to both the Treasury and DfE minister. Based on the wording of the announcement on MR, they seem to be willing to consider using taxpayers’ money to enable the ‘well-offs’, some of whom are non-residents, to avoid paying the newly introduced VAT on private education (apparently, this is justified because of KWC’s outstanding contribution to local economy). IMHO, such a move would be completely unwarranted and prioritises the rich over ordinary taxpayers. Some residents struggle to pay for the essentials including ever-higher energy bills, but the government is not rushed of its feet trying to provide material help to these people - consequently, many are being forced to make lifestyle changes.

If rich people cannot afford to pay VAT on the KWC fees, then they should do what everyone else does; i.e. make adjustments to their spending habits, e.g. go on less luxury holidays, etc.    .

[Banker]

2 minutes ago, code99 said:

It is interesting to observe the mindset of this current IOMG, which does not only apply to the CM but also to both the Treasury and DfE minister. Based on the wording of the announcement on MR, they seem to be willing to consider using taxpayers’ money to enable the ‘well-offs’, some of whom are non-residents, to avoid paying the newly introduced VAT on private education (apparently, this is justified because of KWC’s outstanding contribution to local economy). IMHO, such a move would be completely unwarranted and prioritises the rich over ordinary taxpayers. Some residents struggle to pay for the essentials including ever-higher energy bills, but the government is not rushed of its feet trying to provide material help to these people - consequently, many are being forced to make lifestyle changes.

If rich people cannot afford to pay VAT on the KWC fees, then they should do what everyone else does; i.e. make adjustments to their spending habits, e.g. go on less luxury holidays, etc.    .

Any assistance will be for the overall benefit of the island economy, many local suppliers would lose large contracts, many sports clubs would lose use of sports facilities, many local pupils would transfer to local schools costing the taxpayers money to school them and putting strain on already stretched educational system. Not all parents are rich, some are but many make sacrifices to send children there.

It does appear many see this as a class war and hate the idea that some people can afford more than they can.

[La Colombe]

The government should introduce student loans to cover the vat on KWC fees and charge competitive rates of interest on them. You know, like they do for kids to attend university. The students could then pay them back when they enter gainful employment. 

[wrighty]

This has been an interesting thread.  I still believe that it's reasonable to apply VAT to private school fees, despite Chinahand's well argued philosophical objection to taxing education.  However, I am against 'cliff edge' effects when bringing in fiscal changes.  If the law is (because we're tied to UK for this) that 20% VAT has to be applied to KWC fees from January, then I wouldn't disapprove if IOM Gov helped to phase it in - perhaps parents pay 5% from 2025, 10% from 2026 etc, with IOM Gov making up the shortfall to UK customs and excise.  This would soften the blow and perhaps avoid the school closing with all the consequences for job losses and state school places that that would mean.

How's that for a compromise position folks?

[code99]

57 minutes ago, Banker said:

Any assistance will be for the overall benefit of the island economy, many local suppliers would lose large contracts, many sports clubs would lose use of sports facilities, many local pupils would transfer to local schools costing the taxpayers money to school them and putting strain on already stretched educational system. Not all parents are rich, some are but many make sacrifices to send children there.

It does appear many see this as a class war and hate the idea that some people can afford more than they can.

You are presupposing that introduction of VAT on KWC fees will cause KWC to close. There is no evidence that this is in anyway likely.

What you are citing as potential negative impacts on the local economy could equally apply to any significant business on this Island, e.g. e-gambling industry. Many IOM residents have been tightening their belts - not long ago hospitality sector was arguing for preferential VAT treatment and said that many jobs were under threat. How long will it be before the current lull in the construction industry leads to that industry asking for more government help?

Your point of view reminds me of what happened during the Global Financial Crisis in 2007-08. Then, the rich (bankers) who caused the Crisis received the greatest amounts of government and Central Bank support.

it is impossible for ordinary taxpayers to subsidise the lifestyles of the rich - the rich have to look after themselves and pay what is necessary.

[Ringy Rose]

58 minutes ago, wrighty said:

If the law is (because we're tied to UK for this) that 20% VAT has to be applied to KWC fees from January, then I wouldn't disapprove if IOM Gov helped to phase it in - perhaps parents pay 5% from 2025, 10% from 2026 etc, with IOM Gov making up the shortfall to UK customs and excise.  This would soften the blow

KWC don’t have to pass the tax on. They don’t have to put their prices up by 20%. They can keep the prices the same and take the hit themselves.

KWC have some rich benefactors. If the school’s finances are in such dire strait how about they put their hands in their pockets?

Funny how KWC’s finances weren’t in any sort of trouble a couple of years ago when they were planning to spend £6m on a new swimming pool!

[Ringy Rose]

2 hours ago, code99 said:

If rich people cannot afford to pay VAT on the KWC fees, then they should do what everyone else does; i.e. make adjustments to their spending habits, e.g. go on less luxury holidays, etc.    .

If they can’t afford the fees after cutting out lattes and avocado toast then that’s just tough tits.

 

1 hour ago, Banker said:

It does appear many see this as a class war and hate the idea that some people can afford more than they can.

I have no problem with people affording more than I can.

I have a bloody great big huge problem with people affording more than I can and then demanding huge tax relief to keep them in that lifestyle.

If VAT means some of them can’t afford KWC fees any more then that’s just tough shit. I can’t either and nobody has the violins out for me.

[Banker]

1 hour ago, wrighty said:

This has been an interesting thread.  I still believe that it's reasonable to apply VAT to private school fees, despite Chinahand's well argued philosophical objection to taxing education.  However, I am against 'cliff edge' effects when bringing in fiscal changes.  If the law is (because we're tied to UK for this) that 20% VAT has to be applied to KWC fees from January, then I wouldn't disapprove if IOM Gov helped to phase it in - perhaps parents pay 5% from 2025, 10% from 2026 etc, with IOM Gov making up the shortfall to UK customs and excise.  This would soften the blow and perhaps avoid the school closing with all the consequences for job losses and state school places that that would mean.

How's that for a compromise position folks?

Seems reasonable to me, i think any extra costs would lose some pupils depends on how many. If Buchan site is sold then that cash will help but a lot is earmarked for essential repairs/improvents

[John Wright]

KWC have announced they won’t be passing on the 20% VAT.

I suspect that will be temporary, but, currently, and for the next 2 years, they’ve got a massive building programme updating residential accommodation, building a new form/year centre, and new classrooms, including for the transfer of Buchan students to KWC site.

As the new development isn’t domestic, nor for the most part repair and renovation, even for a qualifying charity, but is commercial  new build, to which the charity exemption won’t apply, VAT will be charged at 20% and will be able to be offset  as input tax against the output tax on fees.

[John Wright]

1 hour ago, wrighty said:

This has been an interesting thread.  I still believe that it's reasonable to apply VAT to private school fees, despite Chinahand's well argued philosophical objection to taxing education.  However, I am against 'cliff edge' effects when bringing in fiscal changes.  If the law is (because we're tied to UK for this) that 20% VAT has to be applied to KWC fees from January, then I wouldn't disapprove if IOM Gov helped to phase it in - perhaps parents pay 5% from 2025, 10% from 2026 etc, with IOM Gov making up the shortfall to UK customs and excise.  This would soften the blow and perhaps avoid the school closing with all the consequences for job losses and state school places that that would mean.

How's that for a compromise position folks?

See my post above.

There is going to be a cushion of some sort anyway. Happy accident or intended?

Whats your take on VAT relief for special education, for those with complex physical or intellectual needs?

I could support that.

[Banker]

10 minutes ago, John Wright said:

KWC have announced they won’t be passing on the 20% VAT.

I suspect that will be temporary, but, currently, and for the next 2 years, they’ve got a massive building programme updating residential accommodation, building a new form/year centre, and new classrooms, including for the transfer of Buchan students to KWC site.

As the new development isn’t domestic, nor for the most part repair and renovation, even for a qualifying charity, but is commercial  new build, to which the charity exemption won’t apply, VAT will be charged at 20% and will be able to be offset  as input tax against the output tax on fees.

Sounds a good solution.

[Ringy Rose]

19 minutes ago, John Wright said:

Whats your take on VAT relief for special education, for those with complex physical or intellectual needs?

If it can’t be provided in the state sector then there should be assistance available. As you know, there is relief for disabled people when they’re buying certain types of equipment.

 And I really do mean can’t, not “Araminta has needs and can’t possibly have those needs met in a school full of plebs”.

24 minutes ago, John Wright said:

As the new development isn’t domestic, nor for the most part repair and renovation, even for a qualifying charity, but is commercial  new build, to which the charity exemption won’t apply, VAT will be charged at 20% and will be able to be offset  as input tax against the output tax on fees.

Sounds fair to me, that’s the other side of VAT- that relief can be claimed against other expenditure that attracted VAT.

Edited August 30 by Ringy Rose

[The Phantom]

You've got to wonder what would happen to the Hogwarts building if KWC did go pop.  I would imagine it would be difficult to sell on to anyone.  Would Govt be then left to pick up the pieces (or not)?

[Ringy Rose]

3 minutes ago, The Phantom said:

You've got to wonder what would happen to the Hogwarts building if KWC did go pop.

It would make a fabulous halls of residence type place for key workers.