Rushed VAT Changes on Private Schools Stir Controversy as Impact Assessment Looms

Criticism mounts over hasty introduction of VAT on private schools, with impact analysis expected shortly before rollout

Damian Hinds, the opposition's education spokesperson, has cautioned that the government is hastening the execution of its proposal to eliminate a VAT exemption for private schools, set to take effect on January 1, 2025.

Political correspondent @FaithLRidler

Wednesday, September 25, 2024, 10:

Critics have charged that the government is hastily advancing proposals to end the VAT exemption for private schools, with an evaluation of the impacts planned only weeks prior to the implementation of the policy.

Beginning in January, the Labour Party plans to eliminate the VAT exemption and the business rates relief currently granted to private schools, aiming to use the funds to employ an additional 6,500 teachers in public schools.

Critics have charged that the government is hastily pushing forward with this new policy. Damian Hinds, the shadow education secretary, emphasized that an evaluation of the potential outcomes has not yet been released.

In response to a written inquiry, Treasury official James Murray stated that the specifics regarding the government's evaluation of the anticipated effects of these policy adjustments will be disclosed during the budget announcement on October 30.

With just two months remaining until the policy's implementation on January 1, 2025, it is expected to clarify if schools must raise their fees or risk shutting down.

Mr. Hinds informed Sky News that the government is "hastily implementing this change."

The opposition's education spokesperson stated: "They plan to implement this tax midway through the school year without providing any evaluation of its potential effects on both the private and public educational sectors. Additionally, there has been no consideration of how it might affect students with special needs or those from minority religious communities."

He also cautioned that this shift might lead to "thousands of students moving to public schools, which could result in larger class sizes and more disturbances for both teachers and students, as well as higher expenses for taxpayers."

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The administration has indicated that the impact analysis, confirmed by the Office for Budget Responsibility, will primarily focus on the broader sectoral effects and anticipated changes in behavior.

An informant noted that by the time the VAT increase takes effect, parents and educational institutions will have had a five-month window to ready themselves. This preparation time was afforded when Chancellor Rachel Reeves explicitly outlined the details and timeline of the adjustment on July 29.

A representative from the government further stated, "Our aim is to guarantee that every child is given the optimal opportunity to thrive."

"Eliminating tax exemptions for private schools will generate the necessary funds to support our educational goals for the upcoming year, including the hiring of 6,500 new teachers."

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Prime Minister Sir Keir Starmer has previously expressed his belief that private schools will adjust to the changes in VAT taxes, noting that "they are not required to transfer the expense to parents."

Recently, Education Secretary Bridget Phillipson stated that private schools which have closed are responsible for their own demise, rejecting any claims that their shutdowns were due to the government's VAT policy.

The policy has taken effect, as Eton College announced in August that due to adjustments in VAT, tuition is expected to increase by 20% starting in January, reaching approximately £63,000 annually.

The current tuition fee for attendees at the private boys' school located near Windsor in Berkshire has risen from £52,749.

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