Labor VAT on private school fees is causing an increase in public school applications
The 20% VAT for workers on private school fees, which will start in January, is already causing a shift from the private sector to the state, with more than 3,000 privately educated students applying to state schools between June and September.
The policy, announced by Chancellor Rachel Reeves in the Budget, will add around £2,000 per pupil to annual school fees. Critics have called it a “wish tax” and warned it could overwhelm the public sector.
New figures reveal that 124 councils across England, Scotland and Wales received 3,011 requests from independent school pupils to transfer to state schools, with a further 2,500 expected to leave in January, according to the Independent Schools Council (ISC).
ISC chief executive Julie Robinson accused Labor of underestimating the impact, pointing out that the Treasury had initially predicted up to 3,000 state transfers during the 2024-25 academic year. Robinson expressed concern about the difficulties in the public sector, saying, “The government has underestimated how many families will be affected.”
The impact of this policy has led some private schools to consider closing. Carrdus School in Oxfordshire, owned by Tudor Hall, has announced it will close in the spring if a buyer is not found. In a letter to parents, Chair of Governors Alison Darling cited VAT on fees and increased employer National Insurance contributions as factors making the school financially unsustainable.
The ISC, which represents more than 550,000 private school pupils in the UK, has taken legal action against the government, saying the policy is discriminatory. This organization, represented by prominent lawyer Lord Pannick KC, says that this policy violates the European Convention on Human Rights, which particularly affects students with special educational needs and disabilities.
Robinson emphasized that ISC’s legal challenge is intended to protect families who may not be able to find suitable public school alternatives. “We continue to ask the government to work with us to reduce the risk of this policy in terms of arts education, religious schools that do not believe well, schools for young girls and children with SEND,” he said.
The Office for Budget Responsibility estimates that the policy could drive 35,000 students from private to public education, raising concerns that an already stretched public sector may struggle to accommodate them. The ISC’s legal claim will focus on the “right to education” and say the policy unfairly targets private school families, potentially forcing them to make their own education choices.
With the first day fast approaching, pressure is mounting on the government to rethink or delay the implementation of the policy to test its full impact on both private and public schools.
