- VAT is a major source of government revenue charged on many goods and services at a standard rate of 20%
- Private school fees will include a 20% VAT starting from 1 January
- The VAT charge applies to all payments for the January term made after 29 July 2024
- About half of England’s private schools are charities and get an 80% reduction on business rates
- Legislation in April 2025 will end this tax relief but plans to remove charitable status from private schools have been cancelled
- The VAT exemption removal affects the whole UK but each nation decides how to use the extra funds
- The government expects to raise an additional £460m in 2024/25 and £1.7bn by 2029/30 from this policy
- Chancellor Rachel Reeves stated all funds raised will support state schools
- Labour plans to use the funds to hire 6,500 new teachers for state schools in England
- State schools face challenges in hiring and retaining teachers particularly in maths and science
- The October Budget allocated funds to address other school issues like infrastructure and support for special needs students
Source: bbc.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
