Private schools reject fees VAT plan

Independent sector warns proposals would force thousands of pupils into state schools – costing up to £600m a year – TES reports

Independent schools have taken aim at a possible Treasury plan to impose VAT on their fees in the upcoming Budget, warning they would force more pupils into the “struggling” state sector.

Chancellor Philip Hammond is reportedly considering imposing the 20 per cent levy on fees in a bid to raise an extra £1.5bn to fund the NHS.

Most of the UK’s 1,300 independent schools are currently exempt from the tax because they are classed as charities.

Their representatives are warning that VAT would mean place private schools out of the financial reach of more families.

“A third of pupils at our schools are on reduced fees. Most of our pupils are from families where both parents work hard to pay the fees,” said Barnaby Lenon, chair of the Independent Schools Council.

“If this measure was introduced, smaller independent schools would certainly close, resulting in a sudden increase in the numbers needing to go to state schools and driving up costs to the taxpayer.”

Recent ISC research estimates fee-paying schools save the UK taxpayer £3.5bn a year, support over 300,000 jobs and contribute £13.7 billion to the economy.

Mike Buchanan, executive director of the Headmasters’ and Headmistresses’ Conference, said if the proposals were true, they were based on “on dodgy maths and wrong assumptions”.

He estimated adding VAT could push 100,000 pupils into maintained schools, each costing around £6,000 a year, meaning an additional cost of £600 million per annum.

“That’s before adding in the price of new schools and facilities which could cost billions at a time when state schools are struggling to cope with lack of funds and dilapidated buildings,” he said.

“We would see class sizes going up in local state schools, a loss of essential community resources, loss of employment, and a huge cost to the Treasury at a time of a funding crisis in many state schools. Rather than the rich paying more, the less well-off would end up suffering the most.”

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The reports of the Conservatives’ VAT proposals echo plans already put forward by Labour to charge VAT on school fees.

Independent school leaders have warned recently that private schools are facing increasing pressure from all sides, including the Conservative Party.

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