NEWS: Labour Plans 20% VAT on Private Schools

As reported by Yahoo News, Labour promises to channel £1.7bn from private school VAT into state education, despite criticisms from headteachers, if it came to power after the general election

This would reportedly raise about £1.7bn of funds that Labour promises to send into the state school system.

This has drawn criticism from some private school headteachers, with warnings that this could cause school fee increases of up to £3,000.

However, Shadow Education Secretary Bridget Phillipson has responded that the warnings are simply “scaremongering”.

“I don’t accept the scaremongering, there are ample places in state schools, particularly in primaries,” she said. “That’s where we’re seeing the sharpest declines in terms of where places will be needed.”

Here’s a closer look at what the private school tax plan could mean.

Will Labour tax private schools?

Labour argues that private schools currently benefit from what they describe as an “unfair tax break” where they don’t pay VAT on fees.

By removing this stipulation, Labour will use the money to improve standards in state schools with more teachers and funding, including resources for mental health support staff in every school.

This comes after the National Education Union organised several strikes in 2023 over low pay and working conditions for teachers in the UK.

Do private schools make a profit?

For-profit schools are not allowed in the UK, with the vast majority of independent schools classed as charities or non-profit making trusts.

However, their funds instead go towards the running of the schools, with the majority of them receiving little or no funds from the government.