Labour will announce the addition of VAT on private schools in the Budget on Wednesday
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The Chancellor Rachel Reeves is set to announce that from January 1st 2025 all private schools in the UK will have to pay 20% value added tax (VAT).
However, there has been a mixed reaction to this policy, with Damian Hinds MP, the Shadow Secretary of State for Education, telling City News he is “deeply concerned” by the policy.
There is certainly those in favour of the tax. Jude Walters, a Mother from Muswell Hill with children at both state and independent schools, said “State schools do need urgent funding”, and that “in the long run, it’s only fair that private education is taxed”.
Labour believe that this policy will help to bring about the necessary funding. Helen Hayes MP, the former shadow minister for education, stated that the policy will raise ‘£1.3bn of funding each year’, and Labour claim that it will help to fund 6,500 new teachers for state schools.
An Unfair Policy?
On the flip side though, Gamal Bemeath, a father with two sons at independent schools in London, feels as though the policy is “unfair”. He believes that it is “levelling down” by meaning that parents like himself, who have made sacrifices to send their children to private schools, find it far harder to afford the fees.
He highlighted that he couldn’t afford to live in areas with strong state schools, and so he felt the only way he could give his sons proper opportunities was by moving them to the independent school in his area. He stated that he would happily pay extra income tax “to support more funding into education”, but believes that this policy will unfairly target fee paying parents.
Mr Hinds added to this sentiment, referring to “big sacrifices” that many parents make to pay for their children’s education. He also believes that the policy is too black and white in assuming that all parents that send their children to private schools must be “comfortably well off”.
VAT to be Imposed in the Middle of the Academic Year
Mr Bemeath is also concerned by the addition of VAT in the middle of the academic year. He highlighted that those parents who cannot afford a hike in fees will be left in a very tricky position, as “no parent wants to disrupt their child in the middle of the year”.
Arabella Stuart, a Governor at Seven Oaks Prep School, also criticised the Labour Government for this aspect of the policy. She criticised them for making a u-turn on their initial promise to not bring in VAT for independent schools until September 2025 at the earliest, claiming that independent schools up and down the country were “tearing their hair out”. She went on to refer to the policy as a “knee jerk reaction”, and something that has “been done in a rush”.
Will the Policy Actually Work?
There are also concerns that the policy might end up being counter-productive
Sarah Cunnane, the Head of Media and Communication at the Independent Schools Council (ISC), fears for the damage that this policy will do to independent schools. She believes that it will lead to school closures, and whilst she was in support of the need for “a fully funded state education system”, she does not believe that “this is the way to go about it”.
The ISC also believes that “10-15%” of pupils will leave the independent sector for state education, meaning they feel the policy will end up costing the taxpayer. Therefore, Sarah Cunnane referred to the £1.3bn of promised funding as a “Brexit bus promise that we don’t think will ever materialise”.
Instead the Committee believes that there needs to be investment from outside the education sector, as “education is an ecosystem”, and so pitting “state versus independent” just ends up impacting both areas negatively.
With the Budget due on Wednesday, the real impact of this shift in Britain’s education system will quickly become far clearer.
City News asked the Treasury and the Cabinet Member for Children Schools and Families for comment in response to these concerns, but no statement was provided.
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HeadlineLabour accused of ‘Brexit Bus Promise’ over imposition of VAT on private schools
Short HeadlineLabour Criticised for 'Brexit Bus Promise' Tax
StandfirstLabour believe that the 20% tax will raise £1.3 billion to invest in state schools, but there are wider concerns with this policy
The Chancellor Rachel Reeves is set to announce that from January 1st 2025 all private schools in the UK will have to pay 20% value added tax (VAT).
However, there has been a mixed reaction to this policy, with Damian Hinds MP, the Shadow Secretary of State for Education, telling City News he is “deeply concerned” by the policy.
There is certainly those in favour of the tax. Jude Walters, a Mother from Muswell Hill with children at both state and independent schools, said “State schools do need urgent funding”, and that “in the long run, it’s only fair that private education is taxed”.
Labour believe that this policy will help to bring about the necessary funding. Helen Hayes MP, the former shadow minister for education, stated that the policy will raise ‘£1.3bn of funding each year’, and Labour claim that it will help to fund 6,500 new teachers for state schools.
An Unfair Policy?
On the flip side though, Gamal Bemeath, a father with two sons at independent schools in London, feels as though the policy is “unfair”. He believes that it is “levelling down” by meaning that parents like himself, who have made sacrifices to send their children to private schools, find it far harder to afford the fees.
He highlighted that he couldn’t afford to live in areas with strong state schools, and so he felt the only way he could give his sons proper opportunities was by moving them to the independent school in his area. He stated that he would happily pay extra income tax “to support more funding into education”, but believes that this policy will unfairly target fee paying parents.
Mr Hinds added to this sentiment, referring to “big sacrifices” that many parents make to pay for their children’s education. He also believes that the policy is too black and white in assuming that all parents that send their children to private schools must be “comfortably well off”.
VAT to be Imposed in the Middle of the Academic Year
Mr Bemeath is also concerned by the addition of VAT in the middle of the academic year. He highlighted that those parents who cannot afford a hike in fees will be left in a very tricky position, as “no parent wants to disrupt their child in the middle of the year”.
Arabella Stuart, a Governor at Seven Oaks Prep School, also criticised the Labour Government for this aspect of the policy. She criticised them for making a u-turn on their initial promise to not bring in VAT for independent schools until September 2025 at the earliest, claiming that independent schools up and down the country were “tearing their hair out”. She went on to refer to the policy as a “knee jerk reaction”, and something that has “been done in a rush”.
Will the Policy Actually Work?
There are also concerns that the policy might end up being counter-productive
Sarah Cunnane, the Head of Media and Communication at the Independent Schools Council (ISC), fears for the damage that this policy will do to independent schools. She believes that it will lead to school closures, and whilst she was in support of the need for “a fully funded state education system”, she does not believe that “this is the way to go about it”.
The ISC also believes that “10-15%” of pupils will leave the independent sector for state education, meaning they feel the policy will end up costing the taxpayer. Therefore, Sarah Cunnane referred to the £1.3bn of promised funding as a “Brexit bus promise that we don’t think will ever materialise”.
Instead the Committee believes that there needs to be investment from outside the education sector, as “education is an ecosystem”, and so pitting “state versus independent” just ends up impacting both areas negatively.
With the Budget due on Wednesday, the real impact of this shift in Britain’s education system will quickly become far clearer.
City News asked the Treasury and the Cabinet Member for Children Schools and Families for comment in response to these concerns, but no statement was provided.
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