Many private school parents will be aware of this, but from January 1st, all private schools will have 20% VAT added to their fees.
The plan from the government is to use the VAT money to recruit more teachers for state schools in England.
Roughly half of the countries private schools are also charities, because of this, they recieve an 80% reduction on business rates. The government have stated that legislation will be introduced from April 2025 to remove this tax relief.
The current government estimates that this policy will raise an extra £460m in 2024/25, rising to £1.7bn by 2029/30. However, some private schools have said that their secondary school numbers have already seen a decline, and it has only been 2 weeks since this introduction.
Is introducing VAT to private school fees the best idea?