Labour’s 20% VAT on private school fees, set to begin in January, is already prompting a shift from the independent to state sector, with over 3,000 privately educated students applying to state schools between June and September.
The policy, announced by Chancellor Rachel Reeves in the Budget, will add an estimated £2,000 per pupil to annual school fees. Critics have labelled it a “tax on aspiration” and warn it could overwhelm the state sector.
New figures reveal that 124 councils across England, Scotland, and Wales received 3,011 applications from private school pupils to transfer to state schools, with an additional 2,500 expected to leave by January, according to the Independent Schools Council (ISC).
ISC Chief Executive Julie Robinson accused Labour of underestimating the impact, pointing out that the Treasury had initially predicted around 3,000 private-to-state transfers over the entire 2024-25 academic year. Robinson voiced concerns over the strain on the state sector, stating, “The government has underestimated how many families will be affected.”
The policy’s impact has already led some private schools to consider closure. Carrdus School in Oxfordshire, owned by Tudor Hall, announced it would close in the spring if a buyer is not found. In a letter to parents, Chair of Governors Alison Darling cited the VAT on fees and increased employer National Insurance contributions as factors making the school financially unsustainable.
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