“Why didn’t school teach me something useful, like tax?” is a question most of us will have asked ourselves at some point in our adult lives as we faintly recall the hours spent learning about ox-bow lakes or similarly unhelpful topics in our school days.
Most UK schools don’t teach their students about tax as it is deemed a better use of time to teach pupils the fundamental skills that will be applicable throughout their lives. Taxation rules and requirements evolve rapidly over time so may make the school’s teachings on this subject redundant.
For answers to all the questions you may have been asking yourself about why schools refuse to teach helpful life skills, including the fundamentals of tax, read on below.
Why don’t UK schools teach students about tax?
Most UK schools follow the national curriculum which deprioritises life skills like taxes as these lessons can be made redundant overtime when the regulations around tax are constantly changing. The curriculum is designed to be ever-green so that the content taught will help students develop the necessary skills and education for later life.
Many young adults find themselves thrown into the workplace or starting a business and struggle to understand the UK’s complex taxation system as they are starting from a position of no knowledge.
If your family and friends are anything like mine, you will have at some point in your life heard somebody question why schools teach things like quadratic equations and glacial retreats when these skills will never be used in 99% of people’s lives.
The conventional wisdom asks why don’t schools teach life skills life taxes which almost every adult will have to understand at some point in their life.
Well, as it turns out, there are a few good reasons:
- Tax isn’t really that hard. For most people formally employed in the UK, tax is all taken care of by your employer via the PAYE system, leaving the indivudal with very little to do beyond complaining about the big chunk of the payslip going to HMRC rather than their pocket.
- If you own a business, the tax guidance is available for free online and the vast majority of it is pretty simple to understand. Most businesses with any type of tax complexity can hire a tax accountant.
- The tax laws and systems change rapidly. If you are taught all about tax at age 15, by the time it comes to applying this knowledge at age 22, many of the laws and processes will have changed, making the knowledge redundant.
- The ultimate goal of schools is to educate students to a baseline level which will enable them to earn a meaningful future income and positively contribute to the economy as a whole.
So with this in mind, does it make sense for schools to omit tax from the syllabus entirely? Not in my opinion. Yes, tax rules and processes change over time, but the fundamental purpose of tax and various types of tax (income, corporation, capital gains, VAT, inheritance etc) stay relatively constant over time and are essential to understanding the economic picture of the country.
Why don’t UK schools teach you how to complete a tax return?
Many young adults would find it helpful to be taught how to complete a tax return prior to adulthood. However, schools don’t teach this as most people don’t need to complete a tax return as tax is paid via the automated PAYE system and the laws and processes around tax returns are constantly evolving.
A tax return is a document individuals (or companies) complete to self-assess the amount of tax they are due to pay to the government on their income, capital gains or company profits.
Most schools, including those teaching under the national curriculum, have come to the decision that teaching students how to complete a tax return is not a good use of time.
Most people aren’t required to complete a tax return as their tax is automatically deducted from their workplace salary and paid to the government via the PAYE system.
The physical process of completing a tax return and the specific taxation laws change from year to year based on the political party in power and the economic decisions decided in the annual budget.
As such, schools that teach students how to complete a tax return risk teaching information that will likely be out-of-date by the time they are in a position to actually apply the lesson.
Should schools teach students about taxes?
Schools should teach students about taxes. Whilst teaching students the specifics of tax returns or tax rates is unnecessary, giving students an understanding of the purpose of taxation, the different types of tax and how tax is paid to the government is important to set students up for adult life.
Understandably, many people in the UK are frustrated that their school work is centred around seemingly useless topics which have no practical value in everyday life. These same people rightfully point out that schools could do a lot more to prepare children for the practicalities of adult life, especially around areas like tax and personal finance.
For the reasons described above, teaching children about the specific tax laws or the process of completing a tax return is likely not a good use of school time. However, that doesn’t mean children shouldn’t learn about taxes at all.
Tax as a topic would fit nicely into a number of other subject areas including Economics, Business Studies, General Studies or even Mathematics.
Through these lessons, the purpose and function of tax could be explained and the various different types of tax that people encounter could be introduced so when complexities around taxation come up in adults lives, they are not starting from a position of 0 knowledge.
Why do schools teach subjects that aren’t helpful in real life?
Schools teach subjects that aren’t necessarily helpful in real life as they are honing the ability of the pupil to learn and measuring this ability via standardised testing rather than teaching specific, applicable knowledge. It is reasonable to suggest that this is sub-optimal and the country could be improved by radically changing the school curriculum.
In many ways, schools aren’t designed to give students the tools to navigate adult lives. After all, each adult is different and what may be helpful for one may be completely redundant for others.
Having said that, pervasive items like understanding basic personal finance, tax and other life skills like cooking seem like common needs across the UK adult population.
As a thought experiment, would the UK population be better off if an hour of geography, history, art or music teaching was swapped out for an hour of ‘practicals’ each week which focused on topics like tax, buying a home, investing, cooking, communicating etc?
My instinct is yes. Whilst these topics are often taught informally by parents to their children, this is clearly not the case across the board and having a set place on a national curriculum for these items would help children of various backgrounds make the transition into adulthood and independence far more successfully.
Of course, there are limitations imposed on schools such as a lack of teaching resources or school ratings being based entirely on academic performance in standardised tests in core subjects which make implementing more practical lessons like this difficult.
Why don’t schools teach about national insurance contributions?
Schools don’t teach about national insurance contributions as for most people these are automatically deducted from their payslips via the PAYE system. The national insurance contribution rates and rules change over time which would make school lessons on this subject redundant by the time they are used.
National insurance contributions are a tax on UK citizens incomes which helps pay for state benefits such as the state pension and maternity/paternity leave.
Do any schools teach their students about taxes in the UK?
Certain schools do make room for taxation on their syllabus although this tends to be a minor part of a wider economics-based curriculum. Private schools and academies are not legally bound by the constraints of the national curriculum like public schools are so have more scope to teach alternative topics.
Clearly sending your child to a private school simply to ensure they are taught a more life-skills focused syllabus is impractical, however, for those wondering, check out my recent article on whether a private school is worth the money.
Whilst some schools do make room for teaching the basics of taxation, this is not typically the prescriptive how-to guide many people envisage. In most cases, it makes more sense to learn about taxes as and when you need to as an adult, using free online resources.
What would be included in a lesson teaching students about taxes?
If taxation were to be more widely taught in schools, the lessons would include an overview of the purpose and history of taxation, the different types of tax (income, capital gains, corporation, inheritance, VAT, national insurance etc) and how each one will impact individuals in their daily lives.
If I had to design a 10-week syllabus teaching students everything they need to know about taxation, it would look something like this:
Week 1: The history and purpose of taxation
Week 2: Introduction to the different types of taxation
Week 3: Everything you need to know about income tax and PAYE
Week 4: Everything you need to know about national insurance contributions
Week 5: Everything you need to know about capital gains tax & inheritance tax
Week 6: Everything you need to know about VAT
Week 7: The laws of taxation and the difference between tax evasion and tax avoidance
Week 8: How to legally minimise your tax burden
Week 9: The morality of tax and avoiding tax discussion
Week 10: Recap and discussion of weeks 1-9
At what age should pupils learn about tax in school?
Taxation focussed lessons at school should take place between the ages of 15-17 so the content comes at a time in their lives when students are close to income-earning age. Any younger than this age will likely be wasted time as it won’t be practically applicable to younger students.
Similarly, if taxation-focussed lessons are left until the final year of 6th form (age 18) many of those who left school at 16 or before will miss out.
Frankly, taxation is a hard topic to make interesting. With this in mind, lessons on the subject should be framed in a way where examples are given directly applicable to students lives.
Examples may include:
“You will pay 20% VAT on your new iPhone, so rather than £1,000 it will cost you £1,200.”
“Any annual income you earn above £50,270 will be taxed at 40%, whilst everything up to this level will be taxed at 20%”
“If you start a business, your profits will be subject to corporation tax at 19%”.
How to teach my child about tax in the UK
Given the reality we’re in where tax is not taught in the majority of UK schools, parents will have to pass this knowledge onto their children. The easiest way is to incorporate these lessons into general discussions such as showing your child what proportion of your payslip is taken by the tax authorities and so on.
Giving your child a well-rounded education about tax in the UK can start from a very young. A common example may be a parent agreeing to drive their child to the shop to get a bag of sweets. If the parent says something like ‘I’ll take my tax of three sweets” this starts to introduce the general concept of tax so it is not so alien in a more realistic setting when the time comes.
Why don’t UK schools teach about credit scores?
UK schools don’t teach about credit and credit scores as they are aiming to generally educate their students rather than teach them specific topics which are subject to future change. Teaching people about the benefits and perils of credit and the importance of maintaining a good credit score should be considered important.
Put simply, ‘credit’ is a system of payment whereby the purchaser doesn’t instantly pay the supplier but agrees to pay them a set amount at a later date, sometimes with interest included.
A credit score is a value assigned to each individual’s credit history to demonstrate to lenders the creditworthiness of the person. The higher the score, the more willing lenders will be able to loan money to people as they are considered more reliable. Good credit scores are important for taking out debt on favourable terms.
Many people in the UK and abroad struggle with debt and poor credit throughout their lives due to an initially poor understanding of what debt is and how overwhelming interest payments can be. For this reason, schools could make a better effort to give pupils a solid understanding of credit.
Unfortunately, there is a lot of money to be made in offering credit to individuals who are then required to pay interest or penalties for late repayments. A cynic may suggest that teaching individuals basic personal finance and about credit in school is not in the financial interest of some of the major organisations operating in the UK who would miss out on the chance to take advantage of poorly educated customers.
As always, please remember I am an Accountant, but not your Accountant. In this post (and all of my others) I share information and oftentimes give anecdotes about what has worked well for me. However, I do not know your personal financial situation and so do not offer individual financial advice. If you are unsure of a particular financial subject, please hire a qualified financial advisor to guide you.
This article has been written by Luke Girling, ACA – a qualified Accountant and personal finance enthusiast in the UK. Please visit my ‘About‘ page for more information. To verify my ACA credentials – please search for my name at the ICAEW member finder. Please comment below or contact me here to get in touch with questions or ideas for future posts.