Future Retirement Success
  • Politics
  • Business
  • Investing
  • Stocks
  • Politics
  • Business
  • Investing
  • Stocks

Future Retirement Success

Business

Labour says middle classes back 20% vat on private school fees

by December 29, 2024
December 29, 2024
Labour says middle classes back 20% vat on private school fees

Middle-class parents have welcomed the government’s move to introduce a 20 per cent VAT charge on private school fees, according to education secretary Bridget Phillipson.

Speaking ahead of the policy’s launch this Wednesday, Phillipson says that many families are “priced out” of independent education by rising costs, and now want a stronger state system instead.

With some boarding schools charging more than £50,000 a year, and the average private school fee now standing at £18,000, Phillipson argues that “pushy middle-class parents” can no longer meet the expense. This, she claims, supports Labour’s position that ending tax breaks for private schools will generate an estimated £460 million in 2024–25—rising to £1.7 billion by 2029–30—funding 6,500 new state teachers and additional mental health support for pupils.

Despite concerns from private schools, whose fees have risen by 75 per cent in real terms since 2000, officials at the Department for Education (DfE) forecast that the VAT uplift will reduce private school enrolment by just 6 per cent, with most of those pupils transferring to state education. Phillipson dismisses warnings of widespread closures as “scaremongering”, noting that state schools recently accommodated significant numbers of pupils from Ukraine and Hong Kong “with no adverse outcomes”.

Private institutions are responding in different ways. Some, including Eton and Westminster School, are passing on the full 20 per cent charge to parents, while others, such as Queen Ethelburga’s near York, are limiting fee rises to 3 per cent. Schools are technically able to reclaim VAT on items such as capital projects and educational supplies, leaving their net VAT liability at around 15 per cent. Phillipson says many have “no good reason” to impose the full hike on parents.

The Independent Schools Council argues that the levy, alongside increased employer national insurance and the loss of charitable business rate relief, leaves schools in an “extremely challenging position”. Carrdus School in Oxfordshire, for example, will close next July, citing these compounding financial pressures. Yet Phillipson insists the new funding stream is key to strengthening the UK’s state schools—representing, she says, a “badge of honour” if it raises standards for children across the country.

Read more:
Labour says middle classes back 20% vat on private school fees

0
FacebookTwitterGoogle +Pinterest
previous post
Why Austria ski holidays have become the top choice among business leaders
next post
Public sector suppliers shift NI and wage hikes onto the taxpayer

You may also like

New London to Sheffield train service planned for...

January 5, 2024

Why Businesses Should Embrace HR Outsourcing: Unlocking Competitive...

June 9, 2023

Jaguar Land Rover retrains staff for electric cars

September 29, 2022

Financial wellbeing startup Mintago closes $4.75m funding round

September 26, 2023

New sweepstake casinos for 2023

February 16, 2023

Jeremy Hunt orders review ‘to end tourist tax’...

February 5, 2024

Building a Resilient Company Culture: Lessons from Tatiana...

March 19, 2024

NatWest boss’s ‘£2.4m exit deal’ is a disgrace,...

August 23, 2023

Over half of UK gig economy workers earn...

May 11, 2023

Musk and Starmer clash over ‘civil war’ claim...

August 6, 2024

    Get free access to all of the retirement secrets and income strategies from our experts! or Join The Exclusive Subscription Today And Get the Premium Articles Acess for Free

    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Recent Posts

    • New book exposes how top Biden comms staffer was ‘tip of the spear’ covering up Biden’s cognitive decline

      May 22, 2025
    • Federal Versus State Policies

      May 22, 2025
    • WeightWatchers pivots from diets to drugs in UK partnership with anti-obesity treatment provider CheqUp

      May 22, 2025
    • Strava’s valuation jumps to $2.2bn following acquisition of UK running app Runna

      May 22, 2025
    • ScaleWise backs BGF’s £15m investment in Cronofy with hands-on due diligence support

      May 22, 2025
    • Government considers selling Kent Brexit border checkpoint amid EU trade deal shake-up

      May 22, 2025

    Categories

    • Business (8,031)
    • Investing (1,976)
    • Politics (15,347)
    • Stocks (3,097)
    • About us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: futureretirementsuccess.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 futureretirementsuccess.com | All Rights Reserved