Starting from New Year’s Day, VAT will be added to private school fees across the UK, with the monies reassigned to funding more teachers for government-controlled state schools. A senior lecturer at Westminster International University in London has said the move suggests the government is basing its policy on envy rather than economic logic. However, Chancellor Rachel Reeves claims that: “every single penny” will be allocated to state schools.
The government’s policy is estimated to generate an additional £460m in revenue in 2024/25 and £1.7bn annually by 2029/30. The extra cash will be distributed among the respective nations of the United Kingdom to use where it is most needed.
Although the changes are likely to impact enrolment at private secondary schools, a Tory source suggested there would not be a domino effect due to the Covid pandemic, which keeps class sizes small across state schools.
Private schools will receive some relief from the new guidelines: Property taxes (known as business rates) are being reduced by 80% for approximately half of the UK’s private schools as charities. However, the UK government has since announced that separate legislation will be issued in April 2025 to end this tax relief.
While some private schools, such as Eton and Harrow, are famous for expensive fees approaching £50,000 per annum, the average school tuition is approximately £15,000. Approximately 7% of all students in the UK are educated at some 2,500 private schools, including approximately 570k children in England. Private schools are not required to follow a national curriculum and have more autonomy than publicly-funded state schools
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