The fallout from the UK election results has begun.
It has been reported in the UK national press that there are 70,000 British students in Spain studying under the British educational system across more than 80 different international schools. There must be many more who are studying under Spain’s private education system usingh the Spanish syllabus.
If reports in the UK press are to be believed, many more families will be soon be deciding on the option of bringing up their children in Spain, rather than suffer the discrimination that the new UK Government has promised.
Many non-doms have also already left the UK, and more will follow
The attack on foreign nationals making use of the non-domiciled tax regime has already forced many to leave the UK. This tax system had existed in a loose form for 200 years eventually being formalised by the UK Income Tax Act of 1914. This system allowed individuals who were resident but not domiciled in the UK, to be taxed only on their UK income and any foreign income brought into the UK, rather than on their worldwide income.
The Conservative party’s 2017 reforms to the scheme did significant damage but Labour will soon kill it off.
Recent and reliable estimates are hard to find but it has been reported that around 2015 there were 120.000 non-domiciled taxpayers who paid 9 billion GBP in income tax and national insurance to the UK system.
How many of these have left or will shortly leave the UK to pay tax elsewhere? There are already reports that they are moving to Switzerland, Monaco and other low tax countries. Even Italy is in the game with a scheme that charges a flat annual 100.000 Euros tax to wealthy foreigners who move to that lovely country.
The folly of politicians with their naïve ideologies.
Private education in Spain – a viable alternative to the UK?
Not content with frightening off the almost totally mobile wealthy, the new UK Government is about to introduce VAT at 20% on private school fees.
The claimed motivation is that this will help fund improvements to the state school sector but no one, not even the most naïve and starry-eyed Labour voters, really believe this. It’s like imagining that car road tax is used to pay for road maintenance! For those who don’t live in the UK, the state of UK roads has become a bad joke in recent years. It has become dangerous to drive at night when you can’t see holes in the road and very dangerous indeed for those who travel on two wheels.
The Labour party detests private education as it considers this shamefully elitist. This is despite many of its party members quietly sending their children to private schools. This reminds us of George Orwell’s Animal Farm quote ‘some being more equal than others’.
It should come as no surprise that financially hard-pressed parents, who refuse to expose their children to increasingly woke offerings of UK state schools, will strongly object to paying 20% VAT on school fees. Indeed, it is very concerning to read comments in the press about the new indoctrination tendencies of UK schools.
Private education costs in Spain vary depending on location and exclusivity but here are some guidelines:
Spanish schools: For many private schools in Spain, especially those in urban areas like Madrid or Barcelona, tuition fees can range from about 4,000€ to 10,000€ per year.
International Schools: These often offer curricula like the International Baccalaureate (IB) or the British curriculum, tend to be more expensive. Fees in these schools can range from 6,000€ to over 20,000€ per year.
It will be obvious to those paying UK school fees that private education in Spain is likely to be a lot cheaper than the UK. Adding 20% VAT to UK school fees is going to make a significant difference for many. Private schools in Spain provide an excellent education with the significant advantage for foreign students being exposed to another culture and becoming fluent in another language.
Interestingly, it would be impossible for Spain to add VAT (IVA) to school fees as it would be illegal under EU wide VAT legislation. So, had the UK not voted for Brexit, the Labour party would not have been able to add VAT to school fees. This is an odd reflection when you consider that the Labour party seems obsessed with the benefits of EU membership.
Indeed, how the UK can tax private schools but not charge VAT on university fees is a legal absurdity. There is no way on earth that the Labour Government could get away with VAT on university fees so we will see whether the UK courts will eventually rule that the Government has broken the law in discriminating against private education.
In the meantime, Spain and many other countries will benefit from an influx of successful and motivated business and wealth creators with their families, leaving the UK a much poorer place.
For those interested in exploring the possibilities of living in Spain and educating your children here, we would be pleased to refer you to education specialists with access to detailed information about suitable schools.
And, of course, we would be delighted to advise you on Spanish taxation, doing business in Spain and, generally, living in Spain. The Spanish tax system is significantly different to the UK and for many, especially after taking account the lower cost of living, it turns out that living in Spain is a financially attractive choice.
