UK (Parliament Politics Magazine) – Labour tax policy forces 12 private schools to close, raising concerns over further shutdowns and increased pressure on state schools.
As reported by The Telegraph, 12 independent schools attribute their closure to the government’s VAT hikes, which they say made operations unsustainable.
Is Labour’s VAT policy forcing private schools to shut down?
At least a dozen schools have cited Labour’s tax policy as the reason for their shutdown, with many others having ceased operations since the policy was seriously considered.
From January 1, private school fees have been hit with a 20% VAT, following the policy’s enforcement.
Official figures reveal that 77 private and specialist schools in England have shut their doors since Labour confirmed plans to impose VAT on school fees in its first year in power.
The VAT levy has been identified as the major reason behind the closure of four schools so far, with another eight announcing plans to shut in the coming months due to financial strain.
How is VAT impacting private school closures?
St Joseph’s Preparatory School in Stoke-on-Trent closed down in December 2024, highlighting financial pressures ahead of the VAT implementation.
The institution stated that the “incredibly difficult” decision was made due to the “changes coming regarding independent school funding.”
Ex-headteacher Roisin Maguire, who served at the Catholic school for 12 years, said the school had no choice but to shut as parents “simply could not manage an extra 20 per cent,” warning that more closures are expected.
Cedars School in Greenock, along with another Scottish school, has blamed the tax raid for their closures in September. The school described the VAT policy as the “straw that broke the camel’s back.”
What did Rupa Huq say about Labour’s VAT policy on private schools?
Rupa Huq, a Labour MP, warned that taxing private schools risks making an “elitist system more elitist.”
She said,
“The Government says in their response [that] ending tax breaks to private schools was a tough but necessary decision. I mean, could there be when this growth comes… a way of undoing it or something?
Ms Huq added,
“What I would suggest is possibly doing it on a turnover basis – so for your enormous schools that can afford it, yes – but for the smaller ones who have been caught in this trap, no,” she told a House of Commons debate on the topic.”
What did Neil O’Brien say about Labour’s tax policy on private schools?
Shadow schools minister Neil O’Brien warned that Labour’s tax policy would ultimately burden parents, students, and teachers in the state sector.
He said,
“Once again, we can see the deeply damaging impacts of Labour’s education tax,”
adding,
“Every independent school that is forced to close by this punitive measure represents more pupils that will need to be found places in state schools, many of which will struggle to accommodate them. Fewer parents will get their first choice of state school as a result.”
How did the government respond to concerns over private school closures?
A government spokesman stated,
“Ending tax breaks for private schools will raise £1.8 billion a year by 2029-30 to help fund public services, including supporting the 94 per cent of children in state schools to achieve and thrive.”
They continued,
“On average, around 50 mainstream private schools typically close each year. This is due to a range of reasons, including financial struggles and school standards issues,”
adding,
“Local authorities and schools commonly support children and parents in these circumstances, we are confident in local state schools’ ability to accommodate new pupils.”
Which 12 private schools have blamed VAT for their closure?
Below are the 12 schools that attributed their shutdown to VAT:
- St Hilda’s Prep School for Girls in Bushey, Herts
- The Village School for Girls in Camden, north London
- Immanuel College Prep School in Bushey, Herts
- Carrdus School in Banbury, Oxon
- Loughborough Amherst School in Loughborough, Leics
- Maidwell Hall in Northampton
- Godolphin Preparatory School in Salisbury, Wilts
- St Joseph’s Preparatory School in Stoke on Trent
- Cedars School in Greenock, Inverclyde
- Kilgraston School in Bridge of Earn, Perthshire
- Downham Preparatory School in Stow Bardolph, Norfolk
- Alton School in Alton, Hants
How will VAT impact private school fees?
The introduction of a 20% VAT on private schools has raised fears of even higher tuition costs. The IFS reports that school fees have already risen by 55% since 2003, with an average yearly fee now standing at £15,000.
With private schools educating around 7% of Britain’s students, worries are mounting over declining enrollment, especially in secondary education. According to the Independent Schools Council, Year 7 admissions in September 2024 fell by 4.6%, and it warned that VAT reforms could further displace pupils.