VAT on private school fees
If the Labour Party is elected and applies VAT to private school fees, there will be a big shakedown of which schools are actually worth it and which are not.
I feel compelled to share my thoughts on the potential impact of the Labour Party's proposal to apply VAT to independent school fees. Ideologically, I am opposed to any decision which reduces parents’ choice without a clear view of how schooling will be improved for ALL pupils in British schools.
Labour’s proposed policy seems like a public relations dog-whistle rather than a serious policy intended to improve educational quality in the UK.
Parents in many independent schools are facing a 10-15% rise in fees; schools will be able to absorb some of the VAT by claiming back input tax, but they cannot do this with staffing costs, which account for more than 60% of the expenditure in a typical UK independent school.
If this proposal is implemented, it will undoubtedly cause a significant shakeup in the private education sector, forcing parents to re-evaluate the value of their investment in their child's education. With the added financial burden of VAT, parents will have to carefully consider whether the high cost of tuition is truly worth the investment. This could lead to a significant decline in enrolment for schools that fail to demonstrate a clear value proposition for their students.
On the other hand, private schools that can prove their worth in terms of academic excellence, personal development, sports, the arts, or perhaps support for neurodivergent learners or those with additional learning needs, may well see an increase in enrolment, as parents are willing to pay the added cost of VAT for the best education locally.
This could lead to greater competition among private schools to attract and retain top talent, ultimately resulting in an overall improvement in the quality of education in the private sector.
Of course, all this assumes Labour wins the next General Election outright AND actually goes ahead with this policy. My hunch is that this is a policy designed to garner support for Keir Starmer on the left and that, if elected, the policy will be dropped after a drawn-out “consultation” because implementing it will be so expensive and damaging.
To read more on the debate, click here: https://www.spectator.co.uk/article/the-true-cost-of-labours-war-on-private-schools/
Picture: 'Old Time Tuition at Dulwich College' (1906) by Walter Charles Horsley, Dulwich Picture Gallery, London