Menu
Save, make, understand money

Household Bills

Labour to shelve plans for VAT on private school fees until 2025

Labour to shelve plans for VAT on private school fees until 2025
Matt Browning
Written By:
Matt Browning
Posted:
24/06/2024
Updated:
26/06/2024

Shadow chancellor Rachel Reeves said Labour will push back its plans to add a VAT for private school fees until 2025, according to reports.

The plan to charge parents extra for sending their children to private schools will not be included in September’s term, should Labour win the general election, she told The Times’ SEO summit.

Instead, the policy will be announced in the party’s first budget during the autumn but would not be implemented until the following year. Most likely, this will be at the beginning of the following school year in September 2025.

At the summit, Reeves reportedly confirmed the party will not have a retrospective tax for parents, as she didn’t think it was “the right thing to do”.

Reeves said: “These changes would be in our first budget, but they would come in after that, not retrospectively.”

She added: “Over the last 14 years, state schools have had to make huge efficiencies because of the cuts to real-terms spending. I strongly believe that private schools, as well, have to be able to make efficiencies.”

On average, private schooling costs £15,000 per year, according to the Independent Schools Council and there are over 2,500 in the UK.

Extra funds to go back into state schools

The exemption on VAT private schools was announced in the Labour manifesto with the intention to invest more in state schools.

Keir Starmer pledged to end the business rate relief to help recruit an extra 6,500 new teachers in a bid to raise school standards in the UK.

Meanwhile, for students who have Special Educational Needs and Disabilities (SEND) and attend private schools, the leader of the opposition said Labour take a “community-wide approach”.

The manifesto promised to “improve inclusivity and expertise in mainstream schools, as well as ensuring special schools cater to those with the most complex needs”.

It also noted that children with legally binding educational health needs in fee-paying schools, due to the lack of opportunity for the required teaching in state schools, would not receive the VAT increase.