Private Schools VAT Changes – What You Need To Know

14.11.24

The Government has said it wants to use the extra money from taxing independent schools - which is expected to be to the tune of hundreds of millions of pounds - to bankroll improvements to state-funded schools.

Chancellor Rachel Reeves said in her Budget day speech: “Ninety four per cent of children in the UK attend state schools. To provide the highest quality of support and teaching that they deserve, we will introduce VAT on private school fees from January 2025.”

This money will, in part, go towards recruiting and training thousands of new teachers, Reeves has previously said that there is currently a severe teacher shortage in the UK, particularly when it comes to secondary school teachers.

There are a number of other government school initiatives underway that may also eventually benefit from extra funding, including its free school breakfasts programme, and plans to roll out mental health staff in schools

What is the ISC lawsuit about?

The ISC’s upcoming legal challenge, which will be headed by leading barrister Lord David Pannick KC, will be brought on behalf of families impacted by the change. Some of the groups which have previously spoken out against the move include military families - which frequently make use of boarding schools - and parents of children with special educational needs and disabilities (SEND).

Many of these families turn to private schooling to meet their child’s needs. In an email to its members last week, the organisation said that it would be arguing that they were not able to find a suitable alternative education in the state school sector.

Chief Executive Julie Robinson said the legal action was about “defending the rights of families who have chosen independent education, but who may no longer be able to do so as a direct result of VAT on their fees”. She continued: “We continue to ask the government to work with us to mitigate the risks of this policy on specialist arts education, on low-fee faith schools, on small girls’ schools and on children with SEND.”