Private schools are set to have their tax-exempt status rescinded in just five months, Chancellor Rachel Reeves has said.
As part of the move, as Reeves announced today in Parliament, schools will have to pay an additional 20 per cent VAT charge by January 1, 2025.
If the roughly 2,500 private schools in the UK choose to pass on the tax rise to parents, it will mean that fees will rise in the middle of the school year.
The Government is also set to levy a charge to all fees which have been paid in advance – in a bid to prevent schools and parents skirting around the tax rise via a prepayment loophole.
Reeves announced schools will have to pay an additional 20 per cent VAT charge by January 1, 2025
GB News/pool
The crackdown on the schools’ tax status had been a core tenet of Labour’s manifesto earlier this year.
Previously, British tax law exempted any form of education provision from VAT – which had long come under fire from critics on the left, who had framed private schools as businesses first, educators second.
Ahead of the General Election, future Home Secretary Yvette Cooper defended the move to GB News, telling The People’s Channel the policy was about “fairness”.
Cooper said: “We think this is about fairness. Other organisations and institutions have to pay VAT.
MORE ON LABOUR’S TAX RAIDS:
Schools including Harrow, Winchester and Eton (clockwise) could see fees bumped up to meet VAT
PA/Google/Eton College
“We do think it’s fair for private schools to pay VAT – and for that money to be used to recruit 6,500 teachers for our state schools right across the country.
“This will help to make sure we can get mental health professionals into our schools because there is a mental health crisis going on with our children.”
The then-Shadow Home Secretary added: “They will need to pay the VAT just like everybody else does. It’s for them to decide what they want then they do about their fees.”
More to follow…